Agenda packet — Newport Beach City Council, February 11, 2025 (part 2 of 4)

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Last Ten Fiscal Years

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Miscellaneous Employees
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary. In 2022, SB 1186 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occuring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014. 146
11-156
273
2019 2018 2017 2016 2015
Measurement Period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability
Service cost 7,334,861$ 7,151,754$ 6,303,642$ 6,087,960$ 6,523,874$ Interest on total pension liability 28,226,598 27,069,673 26,375,073 25,427,094 24,624,559 Differences between expected and actual experience 2,243,854 (4,912,853) (2,686,814) (4,736,006) - Changes in assumptions (2,522,093) 22,616,424 - (6,309,248) - Changes in benefits - - - - - Benefit payments, including refunds of employee contributions (18,458,539) (17,249,398) (16,714,022) (16,374,370) (15,290,340) Net Change in Total Pension Liability 16,824,681 34,675,600 13,277,879 4,095,430 15,858,093 Total Pension Liability - beginning 400,617,677 365,942,077 352,664,198 348,568,768 332,710,674 Total Pension Liability - ending (a) 417,442,358$ 400,617,677$ 365,942,077$ 352,664,198$ 348,568,767$ Plan Fiduciary Net Position
Contributions - employer 15,797,595$ 10,509,243$ 9,904,636$ 6,615,920$ 5,793,768$ Contributions - employee 3,979,337 4,134,130 4,206,942 4,321,646 4,319,336 Net investment income 23,855,196 28,349,491 1,241,432 5,687,908 38,237,161 Administrative expense (435,499) (375,172) (155,791) (287,862) - Other miscellaneous income/(expense) (827,021) - - - - Plan to plan resource movement (700) - (2,387) 26,981 - Benefit payments (18,458,539) (17,249,
398) (16,714,022) (16,374,370) (15,290,340) Net change in Plan Fiduciary Net Position 23,910,369 25,368,294 (1,519,190) (9,777) 33,059,925 Plan Fiduciary Net Position - beginning 279,475,247 254,106,953 255,626,143 255,635,920 222,575,995 Plan Fiduciary Net Position - ending (b) 303,385,616$ 279,475,247$ 254,106,953$ 255,626,143$ 255,635,920$ Net pension liability - ending (a)-(b) 114,056,742$ 121,142,430$ 111,835,124$ 97,038,055$ 92,932,847$ Plan fiduciary net position as a percentage of the total pension liability 72.68% 69.76% 69.44% 72.48% 73.34% Covered payroll 41,468,634$ 41,727,563$ 40,031,404$ 38,512,011$ 37,775,051$ Net pension liability as percentage of covered payroll 275.04% 290.32% 279.37% 251.97% 246.02%

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Last Ten Fiscal Years

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Miscellaneous Employees

Page 2 of 2 ends

147
11-157
274
2024 2023 2022 2021 2020
Actuarially determined contribution 15,211,001$ 15,250,219$ 14,432,250$ 14,600,178$ 13,080,630$ Contributions in relation to the actuarially determined contributions (21,537,720) (20,794,397) (18,372,473) (18,730,840) (16,351,592) Contribution deficiency (excess) (6,326,719)$ (5,544,178)$ (3,940,223)$ (4,130,662)$ (3,270,962)$ Covered payroll 50,824,016$ 48,099,822$ 45,210,057$ 44,809,856$ 43,902,594$ Contributions as a percentage of covered payroll 42.38% 43.23% 40.64% 41.80% 37.25% Notes to Schedule:

Valuation date: 06/30/2021 06/30/2020 06/30/2019 06/30/2018 06/30/2017 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value Inflation 2.30% 2.50% 2.50% 2.50% 2.625%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 6.80% (3) 7.00% (3) 7.00% (3) 7.00% (3) 7.25% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll for bases established prior to June 30, 2019 and level dollar amount for bases established after June 30, 2019 (2) Depending on age, service, and type of employment
(3) Net of pension plan investment and administrative expense; includes inflation (4)
(5)

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
Last 10 Years
Retirement assumptions are based on retirement rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board Defined Benefit Plan for Miscellaneous Employees

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years

Page 1 of 2 ends

148
11-158
275
2019 2018 2017 2016 2015
Actuarially determined contribution 12,374,026$ 11,924,053$ 10,412,963$ 9,943,342$ 7,117,065$ Contributions in relation to the actuarially determined contributions (15,713,898) (15,742,587) (10,412,963) (9,943,342) (7,117,065) Contribution deficiency (excess) (3,339,872)$ (3,818,534)$ -$ -$ -$ Covered payroll 42,153,383$ 41,468,634$ 41,727,563$ 40,031,404$ 38,512,011$ Contributions as a percentage of covered payroll 37.28% 37.96% 24.95% 24.84% 18.48% Notes to Schedule:

Valuation date: 06/30/2016 06/30/2015 06/30/2014 06/30/2013 06/30/2012 Methods and assumptions used to determine contribution rates:

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Miscellaneous Employees

Page 2 of 2 ends

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
149
11-159
276
2024 2023 2022 2021 2020
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 Total Pension Liability
Service cost 10,727,817$ 10,918,046$ 9,817,913$ 9,622,985$ 9,292,715$ Interest on total pension liab ility 45,793,334 43,860,290 42,760,906 41,449,511 40,081,524 Differences between expected and actual experience 9,833,536 (3,451,985) 196,690 957,686 4,798,077 Changes in assumptions - 22,634,816 - - - Changes in benefits 268,557 - - - - Benefit payments, including refunds of employee contributions (37,885,623) (35,654,758) (33,765,218) (32,285,653) (30,443,097) Net Change in Total Pension Liability 28,737,621 38,306,409 19,010,291 19,744,529 23,729,219 Total Pension Liability - beginning 667,148,312 628,841,903 609,831,612 590,087,083 566,357,864 Total Pension Liability - ending (a) 695,885,933$ 667,148,312$ 628,841,903$ 609,831,612$ 590,087,083$ Plan Fiduciary Net Position
Contributions - employer 35,285,332$ 32,394,203$ 32,367,091$ 28,539,301$ 28,344,445$ Contributions - employee 3,577,340 3,417,660 3,347,740 3,249,005 3,162,044 Net investment income 28,993,124 (38,537,209) 93,813,435 19,685,354 24,254,890 Administrative expense (345,814) (317,056) (413,178) (556,832) (263,991) Plan to plan resource movement - - - - (1,570) Benefit payments (37,885,623) (35,654,758) (33,765,218) (32,285,653) (30,443,097) Other miscellaneous income/(expense) - - - - 855 Net chan
ge in Plan Fiduciary Net Position 29,624,359 (38,697,160) 95,349,870 18,631,175 25,053,576 Plan Fiduciary Net Position - beginning 470,269,260 508,966,420 413,616,550 394,985,375 369,931,799 Plan Fiduciary Net Position - ending (b) 499,893,619$ 470,269,260$ 508,966,420$ 413,616,550$ 394,985,375$ Net pension liability - ending (a)-(b) 195,992,314$ 196,879,052$ 119,875,483$ 196,215,062$ 195,101,708$ Plan fiduciary net position as a percentage of the total pension liab ility 71.84% 70.49% 80.94% 67.82% 66.94% Covered payroll 36,538,774$ 35,231,003$ 34,863,204$ 34,279,062$ 33,935,043$ Net pension liability as percentage of covered payroll 536.40% 558.82% 343.85% 572.40% 574.93% Notes to Schedule:

Benefit Changes:

Change in Assumptions:

The figures above generally include any liab ility impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the f igures above, unless the liab ility impact is deemed to be material by the plan actuary. In 2022, SB 1168 increased t he standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Page 1 of 2 ends

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Last Ten Fiscal Years

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Safety Employees
150
11-160
277
2019 2018 2017 2016 2015
Measurement Period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability
Service cost 9,223,465$ 9,015,985$ 8,075,553$ 8,077,826$ 8,091,585$ Interest on total pension liab ility 38,458,387 37,083,966 36,239,226 35,098,055 33,807,462 Differences between expected and actual experience 3,278,018 (2,192,667) (1,613,985) (316,827) - Changes in assumptions (1,630,045) 30,110,384 - (8,359,009) - Changes in benefits - - - - - Benefit payments, including refunds of employee contributions (29,183,598) (28,074,414) (27,447,982) (25,838,982) (24,529,802) Net Change in Total Pension Liability 20,146,227 45,943,254 15,252,812 8,661,063 17,369,245 Total Pension Liability - beginning 546,211,637 500,268,383 485,015,571 476,354,508 458,985,263 Total Pension Liability - ending (a) 566,357,864$ 546,211,637$ 500,268,383$ 485,015,571$ 476,354,508$ Plan Fiduciary Net Position
Contributions - employer 26,779,897$ 19,260,537$ 18,496,776$ 21,529,513$ 12,089,637$ Contributions - employee 3,104,318 2,967,318 2,826,831 2,969,503 3,122,237 Net investment income 29,064,749 34,814,011 1,561,480 7,049,577 47,151,493 Administrative expense (532,480) (462,427) (193,780) (357,866) - Plan to plan resource movement (855) - 2,387 - - Benefit payments (29,183,598) (28,074,414) (27,447,982) (25,838,982) (24,529,802) Other miscellaneous income/(expense) (1,011,188) - - - - Net ch
ange in Plan Fiduciary Net Position 28,220,843 28,505,025 (4,754,288) 5,351,745 37,833,565 Plan Fiduciary Net Position - beginning 341,710,956 313,205,931 317,960,219 312,608,474 274,774,909 Plan Fiduciary Net Position - ending (b) 369,931,799$ 341,710,956$ 313,205,931$ 317,960,219$ 312,608,474$ Net pension liability - ending (a)-(b) 196,426,065$ 204,500,681$ 187,062,452$ 167,055,352$ 163,746,034$ Plan fiduciary net position as a percentage of the total pension liab ility 65.32% 62.56% 62.61% 65.56% 65.63% Covered payroll 32,866,620$ 32,450,020$ 30,816,246$ 30,189,633$ 29,944,665$ Net pension liability as percentage of covered payroll 597.65% 630.20% 607.03% 553.35% 546.83%

Page 2 of 2 ends

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Last Ten Fiscal Years

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Safety Employees
151
11-161
278
2024 2023 2022 2021 2020
Actuarially determined contribution 25,872,229$ 25,952,201$ 25,115,878$ 25,341,788$ 22,980,289$ Contributions in relation to the actuarially determined contributions (36,635,838) (35,283,235) (32,317,538) (32,251,903) (28,531,744) Contribution deficiency (excess) (10,763,609)$ (9,331,034)$ (7,201,660)$ (6,910,115)$ (5,551,455)$ Covered payroll 38,168,411$ 36,538,774$ 35,231,003$ 34,863,204$ 34,279,062$ Contributions as a percentage of covered payroll 95.98% 96.56% 91.73% 92.51% 83.23% Notes to Schedule:

Valuation date: 06/30/2021 06/30/2020 06/30/2019 06/30/2018 06/30/2017 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Market Value Market Va lue Market Value Market Value Market Value Inflation 2.30% 2.50% 2.50% 2.50% 2.625%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 6.80% (3) 7.00% (3) 7.00% (3) 7.00% (3) 7.25% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll for bases established prior to June 30, 2019 and level dollar amount for bases established after June 30, 2019 (2) Depending on age, service, and type of employment
(3) Net of pension plan investment and adm inistrative expense; includes inflation (4)
(5)
Retirement assumptions are based on retirement rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board

Page 1 of 2 ends

Last 10 Years
Defined Benefit Plan for Safety Employees

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan As of June 30, 2024
152
11-162
279
2019 2018 2017 2016 2015
Actuarially determined contribution 22,227,698$ 21,524,636$ 19,338,360$ 18,466,207$ 13,393,374$ Contributions in relation to the actuarially determined contributions (28,346,069) (26,620,697) (19,338,360) (18,466,207) (20,993,374) Contribution deficiency (excess) (6,118,371)$ (5,096,061)$ -$ -$ (7,600,000)$ Covered payroll 33,935,043$ 32,866,620$ 32,450,020$ 30,816,246$ 30,189,633$ Contributions as a percentage of covered payroll 83.53% 81.00% 59.59% 59.92% 69.54% Notes to Schedule:

Valuation date: 06/30/2016 06/30/2015 06/30/2014 06/30/2013 06/30/2012 Methods and assumptions used to determine contribution rates:

Page 2 of 2 ends

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Safety Employees

CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan 153
11-163
280
2024 2023 2022 2021
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Total OPEB Liability
Service cost 635,096$ 530,843$ 529,600$ 521,285$ Interest 3,150,800 3,237,390 2,909,400 2,944,050 Differences between expected and actual experience (393,810) 1,120,534 6,159,865 (219,772) Changes in assumptions 292,126 2,473,450 (302,512) - Changes in benefits terms - - - - Benefit payments, including refunds of member contributions (4,781,574) (4,731,846) (3,786,232) (3,787,663) Net change in Total OPEB Liability (1,097,362) 2,630,371 5,510,121 (542,100) Total OPEB Liability - beginning 54,234,204 51,603,833 46,093,712 46,635,812 Total OPEB Liability - ending (a) 53,136,842$ 54,234,204$ 51,603,833$ 46,093,712$ Plan fiduciary net position
Contributions - employer 6,327,150$ 6,185,537$ 5,785,342$ 4,674,814$ Contributions - member - - - - Net investment income 2,061,410 (4,845,154) 7,184,241 900,087 Benefit payments, including refunds of member contributions (4,781,574) (4,731,846) (3,786,232) (3,787,663) Administrative expense (9,385) (9,000) (9,908) (12,037) Other expense - - - - Net change in plan fiduciary net position 3,597,601 (3,400,463) 9,173,443 1,775,201 Plan fiduciary net position - beginning 31,569,252 34,969,715 25,796,272 24,021,071 Plan fiduciary net position - ending (b) 35,166,853$ 31,569,252$ 34,969,715$ 25,796,272$ City
's Net OPEB liability - ending (a)-(b) 17,969,989$ 22,664,952$ 16,634,118$ 20,297,440$ Plan fiduciary net position as a percentage of the total OPEB liability 66.18% 58.21% 67.77% 55.96% Covered- employee payroll (1) 81,451,477$ 79,636,594 $ 78,621,426 $ 77,637,171 $ City's Net OPEB liability as percentage of covered-employee payroll 22.06% 28.46% 21.16% 26.14% Notes to Schedule:
(1) Covered-employee payroll is used because contributions are not entirely based on a measure of pay. * Fiscal year 2018 was the first year of implementation, therefore only seven years are shown.

Page 1 of 2 ends

CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan As of June 30, 2024

SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS Last 10 Years *
Last Ten Fiscal Years*
154
11-164
281
2020 2019 2018
Measurement Period June 30, 2019 June 30, 2018 June 30, 2017 Total OPEB Liability
Service cost 524,717$ 509,434$ 478,341$ Interest 2,795,490 2,814,685 2,830,153 Differences between expected and actual experience 2,532,319 - - Changes in assumptions 114,311 - - Changes in benefits terms - - - Benefit payments, including refunds of member contributions (3,627,695) (3,641,715) (3,513,406) Net change in Total OPEB Liability 2,339,142 (317,596) (204,912) Total OPEB Liability - beginning 44,296,670 44,614,266 44,819,178 Total OPEB Liability - ending (a) 46,635,812$ 44,296,670$ 44,614,266$ Plan fiduciary net position
Contributions - employer 4,460,937$ 4,675,193$ 4,594,772$ Contributions - member - - - Net investment income 1,495,861 1,605,114 1,875,536 Benefit payments, including refunds of member contributions (3,627,695) (3,641,715) (3,513,406) Administrative expense (4,980) (11,076) (9,452) Other expense - (25,258) - Net change in plan fiduciary net position 2,324,123 2,602,258 2,947,450 Plan fiduciary net position - beginning 21,696,948 19,094,690 16,147,240 Plan fiduciary net position - ending (b) 24,021,071$ 21,696,948$ 19,094,690$ City's Net OPEB liability - ending (a)-(b) 22,614,741$ 22,599,722$ 25,519,576$ Plan fiduciary net position as a percentage of the total OPEB liability 51.51% 48.98% 42.80% Covered- employee payroll (1) 75,814,626$ 73,999,059 $ 74,484,613 $ City's Net OPEB liability as percentage of covered-employee payroll 29.83% 30.54% 34.26%

CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan As of June 30, 2024
Last 10 Years *

Page 2 of 2 ends

SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS Last Ten Fiscal Years*
155
11-165
282
2024 2023 2022 2021
Actuarially determined contribution 3,289,777$ 4,359,593$ 4,124,923$ 4,108,719$ Contributions in relation to the actuarially determined contributions (12,311,540) (7,154,265) (4,950,445) (6,511,545) Contribution deficiency (excess) (9,021,763)$ (2,794,672)$ (825,522)$ (2,402,826)$ Covered-employee payroll (1) 81,451,477$ 81,451,477$ 79,636,594$ 78,621,426$ Contributions as a percentage of covered-employee payroll -15.12% -8.78% -6.22% -8.28% Notes to Schedule:

Valuation date: June 30, 2023 June 30, 2021 June 30, 2019 June 30, 2019 (1) Covered-employee payroll is used because contributions are not entirely based on a measure of pay. * Fiscal year 2018 was the first year of implementation, therefore only seven years are shown.

Page 1 of 2 ends

CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan As of June 30, 2024
Last 10 Years *

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
156
11-166
283
2020 2019 2018
Actuarially determined contribution 3,834,916$ 3,827,337$ 3,925,087$ Contributions in relation to the actuarially determined contributions (5,379,799) (5,133,062) (5,309,626) Contribution deficiency (excess) (1,544,883)$ (1,305,725)$ (1,384,539)$ Covered-employee payroll (1) 77,637,171$ 75,814,626$ 73,999,059$ Contributions as a percentage of covered-employee payroll -6.93% -6.77% -7.18% Notes to Schedule:

Valuation date: June 30, 2017 June 30, 2017 June 30, 2015 Last 10 Years *

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*

Page 2 of 2 ends

CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan As of June 30, 2024
157
11-167
284
Variance with
Final Budget
Positive
Ori
ginal Final Actual (Negative)
Revenues:

Taxes and assessme
nts:

Property 141,373,233$ 142,715,981$ 146,136,871$ 3,420,890$ Sales 48,532,772 45,257,552 43,444,542 (1,813,010) Transient occupancy 31,986,150 31,986,150 31,736,961 (249,189) Other taxes 8,937,999 8,937,999 10,252,076 1,314,077 Intergovernmental 2,289,407 4,644,072 4,977,096 333,024 Licenses, permits and fees 5,746,027 5,746,027 5,568,126 (177,901) Charges for services 24,429,291 24,825,891 25,117,366 291,475 Fines and forfeitures 3,799,784 3,799,784 4,157,294 357,510 Investment income 1,750,000 1,750,000 3,200,616 1,450,616 Net increase in fair value of investments - - 1,652,435 1,652,435 Property income 16,025,781 17,331,591 18,970,340 1,638,749 Donations 412,300 526,151 418,774 (107,377) Other (245,007) 2,842 983,010 980,168 Total reven
ues 285,037,737 287,524,040 296,615,507 9,091,467 Expenditures:

General go
vernment:

City council 924,218 929,844 635,839 294,005 City clerk 1,191,331 1,215,050 1,097,388 117,662 City attorney 2,526,824 2,592,211 2,423,648 168,563 City manager 6,760,030 9,887,013 4,420,332 5,466,681 Finance 11,039,023 11,252,744 9,437,432 1,815,312 Human resources 3,770,070 3,826,377 3,353,986 472,391 Total gene
ral government 26,211,496 29,703,239 21,368,625 8,334,614 Public safety:

Po
lice 73,415,698 76,169,572 74,047,663 2,121,909 Fire 64,405,996 66,718,421 65,534,675 1,183,746 Total public
safety 137,821,694 142,887,993 139,582,338 3,305,655 Public works:

Pu
blic works - general services 33,861,833 36,201,348 34,286,251 1,915,097 Public works 12,732,655 13,891,663 12,986,340 905,323 Utilities 5,982,258 6,329,822 6,812,897 (483,075) Total public
works 52,576,746 56,422,833 54,085,488 2,337,345

CITY OF NEWPORT BEACH
General Fund
Budgetary
Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts

Page 1 of 2 ends

See accompanying notes to req
uired supplementary information
158
11-168
285
Variance with
Final Budget
Positive
Ori
ginal Final Actual (Negative)
Community development:

Community development 13,995,918 15,697,665 14,380,441 1,317,224 Code and water quality enforcement 941,714 967,198 1,003,722 (36,524) Total com
munity development 14,937,632 16,664,863 15,384,163 1,280,700 Community services:

Parking operations 2,227,582 2,961,404 2,316,775 644,629 Library services 10,259,001 11,114,322 10,143,264 971,058 Recreation and senior services 15,394,067 15,811,350 14,928,913 882,437 Total com
munity services 27,880,650 29,887,076 27,388,952 2,498,124 Capital outlay -
- 3,574,983 (3,574,983) Debt service:

Princi
pal - - 1,250,081 (1,250,081) Interest and fiscal charges - - 83,092 (83,092) Total debt s
ervice - - 1,333,173 (1,333,173) Total expe
nditures 259,428,218 275,566,004 262,717,722 12,848,282 Excess of
revenues
over expenditures 25,609,519 11,958,036 33,897,785 21,939,749 Other financing sources (uses):

Trans
fers in 19,020,967 26,926,241 26,926,241 - Transfers out (34,489,272) (59,400,346) (59,400,346) - Inception of leases - - 3,259,414 3,259,414 Inception of subscription-based IT arrangements - - 315,569 315,569 Total other f
inancing
sources (uses) (15,468,305) (32,474,105) (28,899,122) 3,574,983 Net cha
nge in fund balance 10,141,214 (20,516,069) 4,998,663 25,514,732 Fund balance, beginning 91,442,525 91,442,525 91,442,525 -

Fund balance, ending 101,583,739$
70,926,456$ 96,441,188$ 25,514,732$
Budgetary Comparison Schedule
General
Fund
For the Year Ended June 30, 2024

CITY OF NEWPORT BEACH
Budgeted Amounts

Page 2 of 2 ends

See accompanying notes to req
uired supplementary information
159
11-169
286
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental -$
6,000$ 6,481$ 481$
Licenses, permits and fees 100,200 100,200 103,338 3,138 Charges for services 12,650 12,650 38,081 25,431 Fines and forfeitures 30,000 30,000 37,902 7,902 Investment income 192,208 192,208 194,821 2,613 Net increase in fair value of investments - - 77,382 77,382 Property income 13,799,460 13,821,766 15,308,476 1,486,710 Other - - 14,041 14,041 Total revenue
s 14,134,518 14,162,824 15,780,522 1,617,698 Expenditures:

General governmen
t 516,156 516,156 516,156 - Public works 1,326,696 1,433,117 1,507,721 (74,604) Community development 2,250 5,450 20,637 (15,187) Community services 2,445,960 2,856,653 2,487,623 369,030 Capital outlay 1,975,000 4,020,459 726,928 3,293,531 Total expenditure
s 6,266,062 8,831,835 5,259,065 3,572,770

Excess
(deficiency) of revenues
over expenditures 7,868,456 5,330,989 10,521,457 5,190,468 Other financing sources:

Transfers
in 11,152,510 11,252,355 11,252,355 - Transfers out (19,020,966) (19,333,407) (19,333,407) - Total other financ
ing sources (7,868,456) (8,081,052) (8,081,052) - Net change in fu
nd balance - (2,750,063) 2,440,405 5,190,468 Fund balance, beginning 6,107,317 6,107,317 6,107,317 - Fund balance, ending 6,107,317$ 3,357,254$ 8,547,722$ 5,190,468$

CITY OF NEWPORT BEACH
Tide and Submerged Land - Operating
Budgeta
ry Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts
See accompanying notes to required supplementary information 160
11-170
287
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Investment
income 436,141$ 436,141$ 1,309,710$ 873,569$ Net increase in fair value of investments - - 790,072 790,072 Property income 5,258,302 5,258,302 6,624,712 1,366,410

Total revenues 5,694,443 5,694,443 8,724,494 3,030,051 Expenditures:

Capital outlay 3,
471,406 6,976,976 546,959 6,430,017

Excess (deficiency) of revenues
over expenditures 2,223,037 (1,282,533) 8,177,535 9,460,068 Other financing sources:

Transfers in 4,715,000 4,715,000 4,715,000 -

Net change in fund balance 6,938,037 3,432,467 12,892,535 9,460,068 Fund balance, beginning 30,214,811 30,214,811 30,214,811 -

Fund balance, ending 37,152,848$ 33,647,278$ 43,107,346$ 9,460,068$

CITY OF NEWPORT BEACH
Tide and Submerged Land - Harbo
r Capital
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts
See accompanying notes to required
supplementary information
161
11-171
288

CITY OF NEWPORT BEACH
Notes
to Required Supplementary Information
June 30, 2024

(1) Budgetary Control and Compliance

The City adheres to the
following general procedures in establishing the budgetary data reflected in the financial statements:

 During May, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted at City Council meetings to obtain citizen comments. Prior to July 1, the budget is legally adopted through passage of an appropriation resolution.

 Budgets are adopted on an annual basis consistent with generally accepted accounting principles for General and Special Revenue Funds, except for the Opioid Remediation Fund, for which no budget was adopted.

 The City does not present budget information on Capital Projects Funds since the City approves project-length budgets. These project-length budgets authorize total expenditures over the duration of a construction project rather than through year-by-year budgeting.

 The City does not present budget information on Debt Service and Permanent Funds since the City is not required to and does not adopt an annual budget for these funds.

 The budget is formally integrated into the accounting system and employed as a management control device during the year.

 The legal level of budgetary control is at the fund level. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions which alter the total appropriations of any fund must be approved by the City Council.

 At fiscal year-end, budget appropriations lapse. Budget appropriations for incomplete capital projects are re-budgeted in the following fiscal year by City Council action and are included in the revisions noted above. Projects that are not started during the budget year are re-evaluated in the following year.

 Encumbrances represent commitments related to unperformed contracts for goods and services. The City utilizes an encumbrance system as a management control technique to assist in controlling expenditures. Under this system, encumbrance accounting for the expenditure of funds is recorded in order to indicate outstanding commitments and is employed in the governmental fund types. Encumbrances outstanding at year-end are reported as committed or restricted fund balances since they do not constitute expenditures or liabilities. Encumbrances and their related budgets are honored in the subsequent year to fulfill these commitments and are presented in the original adopted budget.

162
11-172
289

CITY OF NEWPORT BEACH
Notes
to Required Supplementary Information
June 30, 2024

(1) Budgetary Control and Compliance (Continued)

Expenditures exceeded appropriation
s in the following governmental fund:

Appropriations Expenditures Variance
Supplemental Law Enforcement Services
$200,000 $241,105 $(41,105)

163
11-173
290

This page left blank intentionally.
164
11-174
291

SUPPLEMENTARY INFORMATION
165
11-175
292

This page left blank intentionally.
166
11-176
293

OTHER GOVERNMENTAL FUNDS

Other Special Revenue Funds

Special Revenue Funds are used to account for the proceeds of specific revenue sources which are legally restricted to expenditures for specified purposes. The City of Newport Beach Special Revenue Funds are as follows:

The State Gas Tax Fund accounts for all State Gas Tax related revenues and expenditures, including street repair, construction, and maintenance. State law requires that these funds be used exclusively for maintenance of the street and highway system.

The SB1 Gas Tax RMRA Fund accounts for all Road Maintenance and Rehabilitation Account related revenues and expenditures. State law requires that these funds be used exclusively for the transportation system. RMRA revenues are from fuel and vehicle registration taxes imposed by the state’s Road Repair and Accountability Act of 2017.

The Asset Forfeiture Fund was established to account for all revenues resulting from the seizure of assets in conjunction with criminal cases (primarily drug trafficking) in which judicial proceedings have been completed . All such funds are property of the City, and i t is the City's policy that these funds shall be used for enhancement of law enforcement programs.

The Office of the Traffic Safety (OTS) DUI Grant Fund is used to account for federal funding of the Selective Traffic Enforcement Program (STEP). These funds are used exclusively for DUI enforcement.

The Circulation and Transportation Fund is used to account for fair share revenues collected from developers and restricted for capital improvement projects meeting the circulation element of the City’s General Plan.

The Building Excise Tax Fund is used to account for revenues received from builders or developers on building or remodeling projects within the City. Expenditures from this fund are used exclusively for public safety, libraries, parks, beaches, or recreational activities.

The Community Development Block Grant Fund is used to account for revenues and expenditures relating to the City's Community Development Block Grant program. These funds are received from the Federal Department of Housing and Urban Development and must be expended exclusively on programs for low or moderate income individuals/families.

The Air Quality Management District Fund is used to account for revenues received from the South Coast Air Quality Management District restricted for the use of reducing air pollution.

The Environmental Liability Fund is used to account for solid waste fees restricted for mitigation of future environmental liability relating to the handling of solid waste.

The Supplemental Law Enforcement Services Fund (SLESF) is used to account for revenues received from the county to be used exclusively for front line law enforcement services.

The Opioid Remediation Fund is used to account for revenues received from various settlements related to opioid manufacturing and distribution to be used exclusively for opioid remediation activities.
167
11-177
294
The Contributions Fund is used to account for revenues received from other government agencies or private developers and expended for specific streets, highway, construction, or water quality projects.

The Fostering Interest in Nature (FIIN) Fund is restricted for recreation and education programming as a mitigation effort by the California Coastal Commission.

The Restricted Programs Fund is used to account for revenues received that are restricted for affordable housing, public arts and culture, parking improvements, and disability access training.

The Measure M Fund is used to account for the revenues and expenditures of funds received from the Orange County Transportation Authority. Expenditures from this fund are used exclusively for transportation related purposes.

The Oceanfront Encroachment Fund is restricted for ocean front restoration and improvement and maintenance to enhance public access and use of ocean beaches as restricted by the Local Coastal Program.

The American Rescue Plan Act Fund is used to account for federal funding received through Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act.

The Miscellaneous Grants Fund is used to account for revenues received from various other miscellaneous grants.

The PEG Fees Fund is used to account for cable franchise fees received from cable providers for support of Public, Education, and Government access programming only.

Other Capital Projects Funds

Capital Projects Funds are used to account for resources used for the acquisition and construction of capital facilities by the City, except those financed by Enterprise Funds.

The City of Newport Beach Capital Projects Funds are as follows:

The Assessment District Fund is used to account for the receipt and expenditure of funds received from 1911 Act and 1915 Act Assessment Districts for capital improvement projects.

The Fire Station Fund is used to account for the design and construction of new fire stations.

The Civic Center and Park Fund is used to account for the design and construction of a new Civic Center Complex. In prior years, this fund was called City Hall Improvements Fund.

The Police Facility Fund is used to account for the purchase, design and construction of a new police station.

The Newport Uptown Undergrounding Fund is used to account for the receipt and expenditures related to the development within the Newport Uptown Planned Community Development Plan.

The Parks and Community Centers Fund is used to account for expenditures for park and community center rehabilitation, expansion and/or replacement in accordance with the Facilities Financing Planning Program.

The Balboa Village Parking Management District Fund is used to account for revenues and expenditures associated with parking management improvements in Balboa Village.

168
11-178
295
The Facilities Maintenance Fund is used to account for revenues and expenditures associated with the maintenance of existing facilities.

The Neighborhood Enhancement Fund is used to account for projects that will enhance neighborhood aesthetics and functionality.

The Miscellaneous FFP Projects Fund is used to account for expenditures for small scale facility rehabilitation, expansion and/or replacement in accordance with the Facilities Financing Planning Program.

The Junior Lifeguards Fund is used to account for capital improvement projects related to the Junior Lifeguards program.

The Unrestricted Capital Improvements Fund is used to separately account for general fund capital improvement projects.

The Park Maintenance Fund is used to account for capital improvement projects associated with the maintenance of existing parks.

Other Permanent Funds

Permanent Funds are used to report resources that are legally restricted for the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. The City of Newport Beach Permanent Funds are as follows:

The Bay Dredging Fund is used to account for the receipt of permanent endowments intended to fund the ongoing cost of maintaining and dredging of the Upper Newport Bay.

The Ackerman Fund is used to account for the receipt of permanent endowments intended as follows: 75% of the fund’s investment proceeds will be used for the purchase of high- tech library equipment while the remaining 25% will be used for scholarships for needy students.

169
11-179
296
SB1 Gas Tax Circulation and
State Gas Tax RMRA Asset Forfeiture OTS DUI Grant Transportation Assets
Cash and investments 3,344,439$ 520,112$ 816,276$ -$ 1,061,904$
Receivables:

Accounts (net of allowance) -
-
-
-
-

Interest 10,233 1,899
1,122
-
3,425

Intergovernmental receivab
les 201,787 382,983 - 59,493 -

Restricted cash and investments wi
th fiscal agent -
-
-
-
-

Prepaid items -
-
-
-
-

Total assets 3,556,459$
904,994$ 817,398$ 59,493$ 1,065,329$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 758,658$ 78,995$ -$ -$
147,180$
Accrued payroll -
-
-
-
-

Unearned revenue -
-
-
-
-

Due to other funds -
-
-
59,652 -

Total liabi
lities 758,658 78,995 - 59,652 147,180
Deferred inflows of resources:

Unavailable revenu
e - -
-
-
-

Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
-
-

Permanent endowment -
-
-
-
-

Restricted 2,797,801 825,999 817,398 - 918,149
Committed -
-
-
-
-

Unassigned -
-
-
(159)
-

Total fund bal
ances (deficits) 2,797,801 825,999 817,398 (159) 918,149
Total liabi
lities, deferred inflows of resources
and fund b
alances 3,556,459$ 904,994$ 817,398$ 59,493$ 1,065,329$ (continued)
Special Revenue

CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June
30, 2024

Page 1 of 7 ends

170
11-180
297
Community Air Quality Supplemental
Building Excise Development
Management Environmental Law Enforcement
Tax Block Grant District Liability Services
Assets
Cash and investments 371,255$ -$
1,739,657$ 9,946,765$ -$

Receivables:

Accounts (net of allowance) 24,974 - -
10,882 -

Interest 1,198
-
5,612
32,084 -

Intergovernmental receivab
les -
229,622 28,062 - -

Restricted cash and investments wi
th fiscal agent -
-
-
-
-

Prepaid items -
-
-
39,723 -

Total assets 397,427$
229,622$ 1,773,331$ 10,029,454$ -$

Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 26,608$ 116,389$ -$ 62,513$ -$

Accrued payroll -
-
-
3,436
-

Unearned revenue -
-
-
-
-

Due to other funds -
113,233 -
-
-

Total liabi
lities 26,608 229,622 - 65,949 -

Deferred inflows of resources:

Unavailable revenu
e - 229,622 28,062 2,516 -

Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
39,723 -

Permanent endowment -
-
-
-
-

Restricted 370,819 -
1,745,269 9,921,266 -

Committed -
-
-
-
-

Unassigned -
(229,622) -
-
-

Total fund bal
ances (deficits) 370,819 (229,622) 1,745,269 9,960,989 -

Total liabi
lities, deferred inflows of resources
and fund b
alances 397,427$ 229,622$ 1,773,331$ 10,029,454$ -$

(continued)
Special Revenue

CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June
30, 2024

Page 2 of 7 ends

171
11-181
298
Opioid Restricted
Remediation Contributions FIIN Programs Measure M
Assets
Cash and investments 505,567$ 11,217,521$ 1,091,280$ 2,504,366$ 2,724,129$ Receivables:

Accounts (net of allowance) -
865,280 -
-
-

Interest -
3 3,520
8,078
8,797

Intergovernmental receivab
les -
44,277
-
-
963,647
Restricted cash and investments wi
th fiscal agent -
-
-
-
-

Prepaid items -
-
-
-
-

Total assets 505,567$
12,127,081$ 1,094,800$ 2,512,444$ 3,696,573$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable -$
2,890,037$ -$
1,882$
106,418$
Accrued payroll -
-
-
-
-

Unearned revenue 505,567 4,256,433 - -
503,122
Due to other funds -
-
-
-
-

Total liabi
lities 505,567 7,146,470 - 1,882
609,540
Deferred inflows of resources:

Unavailable revenu
e - 784,131 - -
554,981
Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
-
-

Permanent endowment -
-
-
-
-

Restricted -
4,196,480 1,094,800 2,510,562 2,532,052 Committed -
-
-
-
-

Unassigned -
-
-
-
-

Total fund bal
ances (deficits) - 4,196,480 1,094,800 2,510,562 2,532,052 Total liabi
lities, deferred inflows of resources
and fund b
alances 505,567$ 12,127,081$ 1,094,800$ 2,512,444$ 3,696,573$ (continued)
Other Governmental Funds
Combining Balance Sheet
June 30, 2024

Page 3 of 7 ends

Special
Revenue

CITY OF NEWPORT BEACH
172
11-182
299
Capital Projects
Oceanfront American Miscellaneous Assessment
Encroachment Rescue Plan Act Grants PEG Fees District
Assets
Cash and investments 1,166,677$ 675,566$ -$ 3,463,701$ -$

Receivables:

Accounts (net of allowance) 35,029
-
-
75,132
-

Interest 3,763
-
-
11,173
153,080
Intergovernmental receivab
les -
-
9,911
-
-

Restricted cash and investments wi
th fiscal agent -
-
-
-
27,328,069
Prepaid items -
-
-
-
-

Total assets 1,205,469$
675,566$ 9,911$
3,550,006$ 27,481,149$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 21,917$ 673,232$ -$ -$
2,460,595$
Accrued payroll -
-
-
-
-

Unearned revenue -
2,334
-
-
-

Due to other funds -
-
9,911
-
58,643

Total liabi
lities 21,917 675,566 9,911 -
2,519,238
Deferred inflows of resources:

Unavailable revenu
e - -
-
-
-

Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
-
-

Permanent endowment -
-
-
-
-

Restricted 1,183,552 -
-
3,550,006 24,961,911
Committed -
-
-
-
-

Unassigned -
-
-
-
-

Total fund bal
ances (deficits) 1,183,552 -
-
3,550,006 24,961,911
Total liabi
lities, deferred inflows of resources
and fund b
alances 1,205,469$ 675,566$ 9,911$ 3,550,006$ 27,481,149$
(continued)
Special Revenue

Page 4 of 7 ends

June 30, 2024

CITY OF NEWPORT BEACH
Ot
her Governmental Funds
Combining Balance Sheet
173
11-183
300
Parks and
Civic Center Newport Uptown Community
Fire Station and Park Police Facility Undergrounding Centers Assets
Cash and investments 3,041,090$ 504,119$ 685,696$ 3,400$ 17,594,132$ Receivables:

Accounts (net of allowance) -
-
-
-
-

Interest 9,810
1,465
2,212
11 56,753
Intergovernmental receivab
les -
-
-
-
-

Restricted cash and investments wi
th fiscal agent 292,893 -
-
-
-

Prepaid items -
-
-
-
-

Total assets 3,343,793$
505,584$ 687,908$ 3,411$ 17,650,885$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 56,704$ 418$
-$
-$
1,543,336$
Accrued payroll -
-
-
-
-

Unearned revenue -
-
-
-
-

Due to other funds -
-
-
-
-

Total liabi
lities 56,704 418
-
-
1,543,336
Deferred inflows of resources:

Unavailable revenu
e - -
-
-
-

Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
-
-

Permanent endowment -
-
-
-
-

Restricted 292,893 -
-
3,411
-

Committed 2,994,196 505,166 687,908 - 16,107,549
Unassigned -
-
-
-
-

Total fund bal
ances (deficits) 3,287,089 505,166 687,908 3,411 16,107,549
Total liabi
lities, deferred inflows of resources
and fund b
alances 3,343,793$ 505,584$ 687,908$ 3,411$ 17,650,885$ (continued)

CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June
30, 2024

Page 5 of 7 ends

Capital Projects
174
11-184
301
Balboa Village
Parking
Management Facilities Neighborhood Miscellaneous Junior District Maintenance Enhancement FFP Projects Lifeguards Assets
Cash and investments 353,586$ 4,502,445$ 12,418,388$ 6,651,776$ 127,906$ Receivables:

Accounts (net of allowance) -
-
-
-
-

Interest 1,140
14,524
40,058
-
413

Intergovernmental receivab
les -
-
-
-
-

Restricted cash and investments wi
th fiscal agent -
-
-
-
-

Prepaid items -
-
-
-
-

Total assets 354,726$
4,516,969$ 12,458,446$ 6,651,776$ 128,319$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 44,133$ 348,828$ 727,614$ 128,949$ 6,173$

Accrued payroll -
-
-
-
-

Unearned revenue -
-
-
-
-

Due to other funds -
-
-
-
-

Total liabi
lities 44,133 348,828 727,614 128,949 6,173

Deferred inflows of resources:

Unavailable revenu
e - -
-
-
-

Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
-
-

Permanent endowment -
-
-
-
-

Restricted -
-
-
-
-

Committed 310,593 4,168,141 11,730,832 6,522,827 122,146 Unassigned -
-
-
-
-

Total fund bal
ances (deficits) 310,593 4,168,141 11,730,832 6,522,827 122,146 Total liabi
lities, deferred inflows of resources
and fund b
alances 354,726$ 4,516,969$ 12,458,446$ 6,651,776$ 128,319$ (continued)

CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June
30, 2024

Page 6 of 7 ends

Capital Projects
175
11-185
302
Total
Unrestricted Other
Capital Park Ackerman Governmental
Improvements Maintenance Bay Dredging Donation Funds
Assets
Cash and investments 16,591,150$ 1,020,012$ 5,612,254$ 1,225,200$ 111,480,369$ Receivables:

Accounts (net of allowance) -
-
-
-
1,011,297
Interest -
3,290
18,103
3,952
395,718
Intergovernmental receivab
les -
-
-
-
1,919,782
Restricted cash and investments wi
th fiscal agent -
-
-
-
27,620,962
Prepaid items -
-
-
-
39,723

Total assets 16,591,150$
1,023,302$ 5,630,357$ 1,229,152$ 142,467,851$ Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 871,003$ 63,700$ -$ 13,220$ 11,148,502$
Accrued payroll -
-
-
-
3,436

Unearned revenue -
-
-
-
5,267,456
Due to other funds -
-
-
-
241,439
Total liabi
lities 871,003 63,700
-
13,220
16,660,833
Deferred inflows of resources:

Unavailable revenu
e - -
-
-
1,599,312
Fund balances (deficits):

Nonspendable:

Prepaid items -
-
-
-
39,723

Permanent endowment -
-
3,857,000 772,781 4,629,781 Restricted -
-
1,773,357 443,151 59,938,876 Committed 15,720,147 959,602 - -
59,829,107
Unassigned -
-
-
-
(229,781)

Total fund bal
ances (deficits) 15,720,147 959,602 5,630,357 1,215,932 124,207,706 Total liabi
lities, deferred inflows of resources
and fund b
alances 16,591,150$ 1,023,302$ 5,630,357$ 1,229,152$ 142,467,851$ Capital Projects Permanent Funds

CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June
30, 2024

Page 7 of 7 ends

176
11-186
303
SB1 Gas Tax Circulation and
State Gas Tax RMRA Asset Forfeiture OTS DUI Grant Transportation Revenues:

Other taxes -$ -$ -$ -$ -$
Intergovernmental 2,331,825 2,197,540 268,095 281,638 - Charge for services - - - - -
Licenses, permits and fees - - - - 299,476
Property income - - - - -
Investment income 131,912 31,060 22,756 - 35,197 Net increase in fair value of in
vestments 81,601 15,656 13,575 - 23,346
Donations - - - - -
Special assessments - - - - -
Other - - - - -
Total revenues 2,545,338 2,244,256 304,426 281,638 358,019 Expenditures:

Current:

General government - - - - -
Public safety - - 17,393 281,797 -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 3,455,116 1,834,308 - - 1,093,629 Total expenditures 3,455,116 1,834,308 17,393 281,797 1,093,629 Excess (deficiency) of reven
ues
over expenditures (909,778) 409,948 287,033 (159) (735,610) Other financing sources (uses):

Transfers in - - - - -
Transfers out - - - - -
Total other finan
cing sources (uses) - - - - -
Net change in fun
d balances (909,778) 409,948 287,033 (159) (735,610) Fund balances (deficits), beg
inning 3,707,579 416,051 530,365 - 1,653,759
Fund balances (deficits), endi
ng 2,797,801$ 825,999$ 817,398$ (159) 918,149$ (continued)
Other Governmental Funds

CITY OF NEWPORT BEACH
Combining Statement
of Revenues,
Special Revenue
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024

Page 1 of 7 ends

177
11-187
304
Community Air Quality Supplemental
Building Excise Development Management
Environmental Law Enforcement
Tax Block Grant District Liability Services
Revenues:

Other taxes -$ -$ -$ 963,173$ -$
Intergovernmental - 95,221 112,059 - 241,105
Charge for services - - - - -
Licenses, permits and fees 190,664 - - - -
Property income - - - - -
Investment income 8,919 - 50,214 293,008 -
Net increase in fair value of in
vestments 4,688 - 30,261 180,497 -
Donations - - - - -
Special assessments - - - - -
Other - - - 66,962 -
Total revenues 204,271 95,221 192,534 1,503,640 241,105 Expenditures:

Current:

General government - - - - -
Public safety - - - - 241,105
Public works - - - 421,635 -
Community development - 324,843 - - -
Community services - - - - -
Capital outlay 21,435 - - 377,713 -
Total expenditures 21,435 324,843 - 799,348 241,105 Excess (deficiency) of reven
ues
over expenditures 182,836 (229,622) 192,534 704,292 - Other financing sources (uses):

Transfers in - - - - -
Transfers out - - - - -
Total other finan
cing sources (uses) - - - - -
Net change in fun
d balances 182,836 (229,622) 192,534 704,292 -
Fund balances (deficits), beg
inning 187,983 - 1,552,735 9,256,697 -
Fund balances (deficits), endi
ng 370,819$ (229,622)$ 1,745,269$ 9,960,989$ -$ (continued)
Other Governmental Funds

CITY OF NEWPORT BEACH
Combining Statement
of Revenues,
Special Revenue
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024

Page 2 of 7 ends

178
11-188
305
Opioid Restricted
Remediation Contributions FIIN Programs Measure M
Revenues:

Other taxes -$
-$
-$
-$
-$

Intergovernmental -
5,083,257 -
-
2,965,303
Charge for services -
-
-
61,917
-

Licenses, permits and fees -
-
-
150,000 -

Property income -
-
-
24,669
-

Investment income -
1,743
33,670
67,756
84,830

Net increase in fair value of i
nvestments -
1,097
21,022
40,531
50,670

Donations -
5,501,518 -
112,587 -

Special assessments -
-
-
-
-

Other 44,976
-
-
66,266
-

Total reven
ues 44,976 10,587,615 54,692 523,726 3,100,803
Expenditures:

Current:

General government 44,976
-
-
-
-

Public safety -
-
-
-
-

Public works -
-
-
-
-

Community development -
-
-
-
-

Community services -
-
149,948 13,671
-

Capital outlay -
10,805,241 -
-
2,520,338
Total expendi
tures 44,976 10,805,241 149,948 13,671 2,520,338
Excess (deficiency)
of revenues
over exp
enditures - (217,626) (95,256) 510,055 580,465
Other financing sources (uses):

Transfers in -
4,643,968 -
-
15,290

Transfers out -
(218,237) -
-
-

Total other fi
nancing sources (uses) - 4,425,731 - -
15,290

Net change in fu
nd balances -
4,208,105 (95,256) 510,055 595,755 Fund balances (deficits), b
eginning - (11,625)
1,190,056 2,000,507 1,936,297 Fund balances (deficits), en
ding -$ 4,196,480$ 1,094,800$ 2,510,562$ 2,532,052$ (continued)
Expenditures and Changes in Fund Balances
Special Revenue
For the Year Ended June 30, 2024

Page 3 of 7 ends

CITY OF NEWPORT BEA
CH
Other Governmental Funds
Combining Statement of Revenues,
179
11-189
306
Capital Projects
Oceanfront American Miscellaneous Assessment
Encroachment Rescue Plan Act Grants PEG Fees District
Revenues:

Other taxes -$ -$ -$ -$ -$
Intergovernmental - 7,071,718 9,911 - -
Charge for services - - - - -
Licenses, permits and fees - - - 307,890 -
Property income 270,561 - - - -
Investment income 33,000 - - 100,757 1,393,470
Net increase in fair value of in
vestments 19,596 - - 61,255 68,033
Donations - - - - -
Special assessments - - - - 26,843,142
Other - - - - -
Total revenues 323,157 7,071,718 9,911 469,902 28,304,645 Expenditures:

Current:

General government - 3,535 - 72,433 -
Public safety - - 9,911 - -
Public works - 115,499 - - 9,401,847
Community development - - - - -
Community services - - - - -
Capital outlay 85,228 1,726,042 - - -
Total expenditures 85,228 1,845,076 9,911 72,433 9,401,847 Excess (deficiency) of reven
ues
over expenditures 237,929 5,226,642 - 397,469 18,902,798 Other financing sources (uses):

Transfers in - - - - 5,300
Transfers out - (5,226,642) - - (1,230,300)
Total other finan
cing sources (uses) - (5,226,642) - - (1,225,000.00) Net change in fun
d balances 237,929 - - 397,469 17,677,798
Fund balances (deficits), beg
inning 945,623 - - 3,152,537 7,284,113
Fund balances (deficits), endi
ng 1,183,552$ -$ -$ 3,550,006$ 24,961,911$
(continued)
Combining Statement of Revenues,
Expenditures and Changes in Fund
Balances

CITY OF NEWPORT BEACH
Other Governmental Funds

Page 4 of 7 ends

For the Year Ended June 30, 2024
Special Revenue
180
11-190
307
Parks and
Civic Center Newport Uptown Community
Fire Station and Park Police Facility Undergrounding Centers Revenues:

Other taxes -$
-$
-$
-$
-$

Intergovernmental -
-
-
-
-

Charge for services -
-
-
-
-

Licenses, permits and fees -
-
-
-
-

Property income -
-
-
-
-

Investment income 102,256 13,536 18,654 101 528,941
Net increase in fair value of i
nvestments 56,411 8,298
14,748 62
303,359
Donations -
-
-
-
-

Special assessments -
-
-
-
-

Other -
-
-
-
-

Total reven
ues 158,667 21,834 33,402 163 832,300
Expenditures:

Current:

General government -
2,033
-
-
-

Public safety -
-
-
-
-

Public works -
-
-
-
-

Community development -
-
-
-
-

Community services -
-
-
-
-

Capital outlay 181,529
-
4,250
-
6,361,244
Total expendi
tures 181,529 2,033
4,250
-
6,361,244
Excess (deficiency)
of revenues
over exp
enditures (22,862) 19,801 29,152 163 (5,528,944)
Other financing sources (uses):

Transfers in -
-
-
-
6,955,012
Transfers out -
-
-
-
-

Total other fi
nancing sources (uses) - - -
-
6,955,012
Net change in fu
nd balances (22,862) 19,801 29,152 163 1,426,068
Fund balances (deficits), b
eginning 3,309,951 485,365 658,756 3,248 14,681,481
Fund balances (deficits), en
ding 3,287,089$ 505,166$ 687,908$ 3,411$ 16,107,549$ (continued)
Combining Statement of Revenues,
Expenditures and Changes i
n Fund Balances
For the Year Ended June 30, 2024

Page 5 of 7 ends

Other Governmental Funds

CITY OF NEWPORT BEACH
Capital Projects
181
11-191
308
Balboa Village
Parking
Management Facilities Neighborhood Miscellaneous Junior District Maintenance Enhancement FFP Projects Lifeguards Revenues:

Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charge for services - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 11,052 176,997 450,872 - 1,717 Net increase in fair value of in
vestments 6,771 109,416 294,045 - 466
Donations - - - - -
Special assessments - - - - -
Other - - - - -
Total revenues 17,823 286,413 744,917 - 2,183 Expenditures:

Current:

General government - - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 86,475 2,673,645 6,551,637 289,263 167,481 Total expenditures 86,475 2,673,645 6,551,637 289,263 167,481 Excess (deficiency) of reven
ues
over expenditures (68,652) (2,387,232) (5,806,720) (289,263) (165,298) Other financing sources (uses):

Transfers in - 2,500,000 1,665,952 4,940,281 286,361 Transfers out - - - - -
Total other finan
cing sources (uses) - 2,500,000 1,665,952 4,940,281 286,361 Net change in fun
d balances (68,652) 112,768 (4,140,768) 4,651,018 121,063 Fund balances (deficits), beg
inning 379,245 4,055,373 15,871,600 1,871,809 1,083 Fund balances (deficits), endi
ng 310,593$ 4,168,141$ 11,730,832$ 6,522,827$ 122,146$ (continued)
For the Year Ended June 30, 2024

Page 6 of 7 ends

CITY OF NEWPORT BEACH
Ot
her Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
Capital Projects
182
11-192
309
Total
Unrestricted Other
Capital Park Ackerman Governmental
Improvements Maintenance Bay Dredging Donation Funds
Revenues:

Other taxes -$
-$
-$
-$
963,173
Intergovernmental -
-
-
-
20,657,672
Charge for services -
-
-
-
61,917
Licenses, permits and fees -
-
-
-
948,030
Property income -
-
-
-
295,230
Investment income -
31,748 167,037 36,736 3,827,939 Net increase in fair value of i
nvestments -
18,148 102,289 22,507 1,548,348 Donations -
-
-
-
5,614,105
Special assessments -
-
-
-
26,843,142
Other -
-
-
-
178,204
Total reven
ues - 49,896 269,326 59,243 60,937,760 Expenditures:

Current:

General government -
-
-
-
122,977
Public safety -
-
-
-
550,206
Public works -
-
-
-
9,938,981
Community development -
-
-
4,900
329,743
Community services -
-
-
19,940 183,559
Capital outlay 7,602,296
90,294 -
-
45,927,164
Total expendi
tures 7,602,296 90,294 - 24,840 57,052,630
Excess (deficiency)
of revenues
over exp
enditures (7,602,296) (40,398)
269,326 34,403 3,885,130 Other financing sources (uses):

Transfers in 12,776,641 1,000,000 - -
34,788,805
Transfers out (1,000,000)
-
-
-
(7,675,179)
Total other fi
nancing sources (uses) 11,776,641 1,000,000 - -
27,113,626
Net change in fu
nd balances 4,174,345 959,602 269,326 34,403 30,998,756 Fund balances (deficits), b
eginning 11,545,802 -
5,361,031 1,181,529 93,208,950 Fund balances (deficits), en
ding 15,720,147$ 959,602$ 5,630,357$ 1,215,932$ 124,207,706$

CITY OF NEWPORT BEACH

Page 7 of 7 ends

Capital
Projects Permanent Funds
Other Governmental Funds
Combining Statement of Revenues,
Expenditures
and Changes in Fund Balances
For the Year Ended June 30, 2024
183
11-193
310
Variance with
Final Budget
Positive
Original Final Actual (Negativ
e)
Revenues:

Intergovernmental 2,189,879$ 2,189,879$ 2,331,825$ 141,946$ Investment income 21,669 21,669 131,912 110,243 Net increase in fair value of investments - - 81,601 81,601 Total revenues 2,211,548 2,211,548 2,545,338 333,790 Expenditures:

Capital outlay 1,864,993 5,690,245 3,455,116 2,235,129 Net change in fund balance 346,555 (3,478,697) (909,778) 2,568,919 Fund balance, beginning 3,707,579 3,707,579 3,707,579 - Fund balance, ending 4,054,134$ 228,882$ 2,797,801$ 2,568,919$

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
184
11-194
311

Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental 1,846,884 $ 1,846,884 $ 2,197,540 $ 350,656 $ Investment income 3,321 3,321 31,060 27,739 Net increase in fair value of investments - - 15,656 15,656 Total revenues 1,850,205 1,850,205 2,244,256 394,051 Expenditures:

Capital outlay 2,000,000 1,834,308 1,834,308 - Net change in fund balance (149,795) 15,897 409,948 394,051 Fund balance, beginning 416,051 416,051 416,051 - Fund balance, ending 266,256 $ 431,948 $ 825,999 $ 394,051 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
SB1 Gas Tax RMRA Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
185
11-195
312
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental - $ - $ 268,095$ 268,095 $ Investment income - - 22,756 22,756 Net increase in fair value of investments - - 13,575 13,575 Total revenues - - 304,426 304,426 Expenditures:

Public safety 65,000 65,000 17,393 47,607 Net change in fund balance (65,000) (65,000) 287,033 352,033 Fund balance, beginning 530,365 530,365 530,365 - Fund balance, ending 465,365 $ 465,365 $ 817,398 $ 352,033 $ Budgeted Amounts

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2024
186
11-196
313
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental - $ 376,000$ 281,638 $ (94,362) $ Expenditures:

Public safety - 376,000 281,797 94,203 Net change in fund balance - - (159) (159) Fund balance, beginning - - - - Fund balance, ending -$ -$ (159)$ (159)$ Budgeted Amounts

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
OTS DUI Grant Special Revenue Fund
For the Year Ended June 30, 2024
187
11-197
314
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Licenses, permits and fees - $ - $ 299,476$ 299,476 $ Investment income - - 35,197 35,197 Net increase in fair value of investments - - 23,346 23,346 Total revenues - - 358,019 358,019 Expenditures:

Capital outlay - 1,253,127 1,093,629 159,498 Net change in fund balance - (1,253,127) (735,610) 517,517 Fund balance, beginning 1,653,759 1,653,759 1,653,759 - Fund balance, ending 1,653,759 $ 400,632 $ 918,149 $ 517,517 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
188
11-198
315
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Licenses, permits and fees 202,950 $ 202,950 $ 190,664 $ (12,286) $ Investment income 3,006 3,006 8,919 5,913 Net increase in fair value of investments - - 4,688 4,688 Total revenues 205,956 205,956 204,271 (1,685) Expenditures:

Capital outlay - 379,207 21,435 357,772 Net change in fund balance 205,956 (173,251) 182,836 356,087 Fund balance, beginning 187,983 187,983 187,983 - Fund balance, ending 393,939 $ 14,732 $ 370,819 $ 356,087 $ Budgeted Amounts

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 2024
189
11-199
316
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental 385,974 $ 1,074,362 $ 95,221 $ (979,141) $ Total revenues 385,974 1,074,362 95,221 (979,141) Expenditures:

Community development 183,586 1,074,362 324,843 749,519 Debt service:

Principal 208,000 - - - Interest and fiscal charges 2,548 - - - Total expenditures 394,134 1,074,362 324,843 749,519 Net change in fund balance (8,160) - (229,622) (229,622) Fund balance, beginning - - - - Fund balance (deficit), ending (8,160) $ - $ (229,622)$ (229,622) $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
190
11-200
317
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental 100,000 $ 100,000 $ 112,059 $ 12,059 $ Investment income 16,734 16,734 50,214 33,480 Net increase in fair value of investments - - 30,261 30,261 Total revenues 116,734 116,734 192,534 75,800 Expenditures:

Capital outlay - 216,319 - 216,319 Net change in fund balance 116,734 (99,585) 192,534 292,119 Fund balance, beginning 1,552,735 1,552,735 1,552,735 - Fund balance, ending 1,669,469 $ 1,453,150 $ 1,745,269 $ 292,119 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
191
11-201
318
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Other taxes 670,563 $ 670,563 $ 963,173 $ 292,610 $ Investment income 153,829 153,829 293,008 139,179 Net increase in fair value of investments - - 180,497 180,497 Other revenue 40,000 40,000 66,962 26,962 Total revenues 864,392 864,392 1,503,640 639,248 Expenditures:

Public works 714,458 714,458 421,635 292,823 Capital outlay - 1,273,486 377,713 895,773 Total expenditures 714,458 1,987,944 799,348 1,188,596 Net change in fund balance 149,934 (1,123,552) 704,292 1,827,844 Fund balance, beginning 9,256,697 9,256,697 9,256,697 - Fund balance, ending 9,406,631 $ 8,133,145 $ 9,960,989 $ 1,827,844 $ Budgeted Amounts

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 2024
192
11-202
319
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental 250,000 $ 250,000 $ 241,105 $ (8,895) $ Expenditures:

Public safety 200,000 200,000 241,105 (41,105) Net change in fund balance 50,000 50,000 - (50,000) Fund balance, beginning - - - - Fund balance, ending 50,000 $ 50,000 $ - $ (50,000)$ Budgeted Amounts

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30, 2024
193
11-203
320
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Other - $ - $ 44,976$ 44,976 Expenditures:

General government - 395,766 44,976 350,790 Net change in fund balance - (395,766) - 395,766 Fund balance, beginning - - - - Fund balance, ending - $ (395,766)$ - $ 395,766$

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Opioid Remediation Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
194
11-204
321
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental - $ 7,643,957$ 5,083,257 $ (2,560,700) $ Investment income 36,532 36,532 1,743 (34,789) Net increase in fair value of investments - - 1,097 1,097 Donations - 9,079,969 5,501,518 (3,578,451) Other - 42,650 - (42,650) Total revenues 36,532 16,803,108 10,587,615 (6,215,493) Expenditures:

Capital outlay 8,502,000 20,805,623 10,805,241 10,000,382 Excess (deficiency) of revenues
over expenditures (8,465,468) (4,002,515) (217,626) 3,784,889 Other financing sources:

Transfers in - 4,643,968 4,643,968 - Transfers out - (218,237) (218,237) - Total other financing sources (uses) - 4,425,731 4,425,731 - Net change in fund balance (8,465,468) 423,216 4,208,105 3,784,889 Fund balance, beginning (11,625) (11,625) (11,625) - Fund balance, ending (8,477,093) $ 411,591 $ 4,196,480 $ 3,784,889 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Contributions Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
195
11-205
322
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Investment income 23,910 $ 23,910 $ 33,670 $ 9,760 $ Net increase in fair value of investments - - 21,022 21,022 Donations - 75,000 - (75,000) Total revenues 23,910 98,910 54,692 (44,218) Expenditures:

Community services 147,000 233,669 149,948 83,721 Net change in fund balance (123,090) (134,759) (95,256) 39,503 Fund balance, beginning 1,190,056 1,190,056 1,190,056 - Fund balance, ending 1,066,966 $ 1,055,297 $ 1,094,800 $ 39,503 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
FIIN Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
196
11-206
323

Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Charges for services - $ - $ 61,917$ 61,917 $ Licenses, permits and fees 150,000 150,000 150,000 - Property income 32,118 32,118 24,669 (7,449) Investment income - - 67,756 67,756 Net increase in fair value of investments - - 40,531 40,531 Donations 35,000 35,000 112,587 77,587 Other 16,672 16,672 66,266 49,594 Total revenues 233,790 233,790 523,726 289,936 Expenditures:

Community development - 20,000 - 20,000 Community services - 46,351 13,671 32,680 Total expenditures - 66,351 13,671 52,680 Net change in fund balance 233,790 167,439 510,055 342,616 Fund balance, beginning 2,000,507 2,000,507 2,000,507 - Fund balance, ending 2,234,297 $ 2,167,946 $ 2,510,562 $ 342,616 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Restricted Programs Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
197
11-207
324
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental 2,728,303 $ 4,920,550 $ 2,965,303 $ (1,955,247) $ Investment income 7,122 7,122 84,830 77,708 Net increase in fair value of investments - - 50,670 50,670 Total revenues 2,735,425 4,927,672 3,100,803 (1,826,869) Expenditures:

Capital outlay 1,857,000 6,185,248 2,520,338 3,664,910 Excess (deficiency) of revenues
over expenditures 878,425 (1,257,576) 580,465 1,838,041 Other financing sources:

Transfers in - 15,290 15,290 - Net change in fund balance 878,425 (1,242,286) 595,755 1,838,041 Fund balance, beginning 1,936,297 1,936,297 1,936,297 - Fund balance, ending 2,814,722 $ 694,011 $ 2,532,052 $ 1,838,041 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Measure M Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
198
11-208
325
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Property income 259,728 $ 259,728 $ 270,561 $ 10,833 $ Investment income - - 33,000 33,000 Net increase in fair value of investments - - 19,596 19,596 Total revenues 259,728 259,728 323,157 63,429 Expenditures:

Capital outlay - 302,041 85,228 216,813 Net change in fund balance 259,728 (42,313) 237,929 280,242 Fund balance, beginning 945,623 945,623 945,623 - Fund balance, ending 1,205,351 $ 903,310 $ 1,183,552 $ 280,242 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Oceanfront Encroachment Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
199
11-209
326
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental -$ 7,071,718$ 7,071,718$ -$
Expenditures:

General government - 3,535 3,535 -
Public works - 115,499 115,499 -
Capital outlay 10,100,000 1,726,042 1,726,042 - Total expenditures 10,100,000 1,845,076 1,845,076 - Excess (deficiency) of revenues
over expenditures (10,100,000) 5,226,642 5,226,642 - Other financing uses:

Transfers out - (5,226,642) (5,226,642) -
Net change in fund balance (10,100,000) - - -
Fund balance, beginning - - - -
Fund balance (deficit), ending (10,100,000)$ -$ -$ -$ Budgeted Amounts

CITY OF NEWPORT BEACH
American Rescue Plan Act
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
200
11-210
327
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental - $ 9,911$ 9,911 $ - $ Expenditures:

Public safety - 9,911 9,911 - Net change in fund balance - - - - Fund balance, beginning - - - - Fund balance, ending - $ - $ - $ - $ Budgeted Amounts
For the Year Ended June 30, 2024
Miscellaneous Grants Special Revenue Fund
Budgetary Comparison Schedule

CITY OF NEWPORT BEACH
201
11-211
328
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Licenses, permits and fees 360,000 $ 360,000 $ 307,890 $ (52,110) $ Investment income - - 100,757 100,757 Net increase in fair value of investments - - 61,255 61,255 Total revenues 360,000 360,000 469,902 109,902 Expenditures:

General government - 90,000 72,433 17,567 Net change in fund balance 360,000 270,000 397,469 127,469 Fund balance, beginning 3,152,537 3,152,537 3,152,537 - Fund balance, ending 3,512,537 $ 3,422,537 $ 3,550,006 $ 127,469 $

CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
PEG Fees Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
202
11-212
329

SUPPLEMENTARY INFORMATION

203
11-213
330

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INTERNAL SERVICE FUNDS

The Internal Service Funds are used to allocate the cost of providing goods and services by one department to other departments on a cost reimbursement basis.

The City of Newport Beach Internal Service Funds are listed below:

The Insurance Reserve Fund is used to account for the City's self- insured general liability and workers' compensation program.

The Compensated Absences Fund is used to account for the City’s accumulated liability for compensated absences.

The Retiree Insurance Fund is used to account for the cost of providing post-employment health care benefits.

The Equipment Maintenance Fund is used to account for the cost of maintaining and replacing the City’s ro lling stock fleet, parking equipment, coordinated communications system equipm ent, fire equipment and recreation equipment.

The Information Technology Fund is used to account for the cost of maintaining and replacing the City’s computers, printers, copiers and telecommunication services to other departments.

205
11-215
332
Total
Insurance Compensated Retiree Equipment
Information Internal
Assets Reserve Absences Insurance Maintenance Technology Service Funds Current assets:

Cash and investments 44,053,148$ 7,752,988$
932,028$ 20,743,381$ 12,846,738$ 86,328,283$
Receivables:

Accounts (net of allowance) 26,216 - 857 - - 27,073 Interest 140,638 24,789 3,231 66,868 41,396 276,922 Inventories - - - 463,782 - 463,782 Prepaid items -
- 69,865 57,837 668,196 795,898

Total current assets 44,220,002 7,777,777 1,005,981 21,331,868 13,556,330 87,891,958

Noncurrent assets:

Capital assets:

Equipment - - - 45,058,356 3,528,518 48,586,874 Intangible right to use equipment - - - - 363,725 363,725 Structures - - - 39,581 - 39,581 Software - - - - 4,360,625 4,360,625 Intangible right to use subscriptions
- - - 1,723,597 547,676 2,271,273 Less accumulated depreciation/amortization -
- - (29,481,200) (6,969,102) (36,450,302)

Total capital assets (net
of accumulated
depreciation/amortiz
ation) - - - 17,340,334 1,831,442 19,171,776 Total assets 44,220,002
7,777,777 1,005,981 38,672,202 15,387,772 107,063,734 Deferred outflows of resources:

Deferred amount from pension plans - - - 917,183 1,838,389 2,755,572 Deferred amount from OPEB -
- - 252,071 505,254 757,325 Total deferred outflows of r
esources - - - 1,169,254 2,343,643 3,512,897 Liabilities
Current liabilities:

Accounts payable 14,315,707 - - 208,793 71,239 14,595,739 Accrued payroll 11,853 151,607 185,588 43,861 110,774 503,683 Due to other funds - - 353,001 - - 353,001 Workers' compensation - current 4,035,291 - - - - 4,035,291 General liability - current 3,577,058 - - - - 3,577,058 Compensated absences - current - 3,539,392 - - - 3,539,392 Lease liability - current - - - - 73,074 73,074 Subscription liability - curr
ent - - - 169,441 35,391 204,832 Total current liabil
ities 21,939,909 3,690,999 538,589 422,095 290,478 26,882,070 Noncurrent liabilities:

Workers' compensation 19,415,272 - - - - 19,415,272 General liability 7,264,260 - - - - 7,264,260 Compensated absences - 10,108,774 - - - 10,108,774 Lease liability - - - - 67,340 67,340 Subscription liability - - - 1,300,946 - 1,300,946 Net pension liability - - - 2,238,339 4,486,532 6,724,871 Net OPEB liability -
- - 202,999 406,900 609,899 Total noncurrent liabil
ities 26,679,532 10,108,774 - 3,742,284 4,960,772 45,491,362 Total li
abilities 48,619,441 13,799,773 538,589 4,164,379 5,251,250 72,373,432 Deferred inflows of resources:

Deferred amount from pension plans - - - 9,675 19,388 29,063 Deferred amount from OPEB -
- - 7,724 15,482 23,206 Total deferred inflows of r
esources - - - 17,399 34,870 52,269 Net Position
Invested in capital assets - - - 15,801,398 1,644,277 17,445,675 Unrestricted (4,399,439) (6,021,996) 467,392 19,858,280 10,801,018 20,705,255 Total net pos
ition (4,399,439)$ (6,021,996)$ 467,392$ 35,659,678$ 12,445,295$ 38,150,930$

CITY OF NEWPORT BEACH
Internal
Service Funds
Combining Statement of Net Position
June 30, 2024
206
11-216
333
Total
Insurance Compensated Retiree Equipment Information Interna l
Reserve Absences Insurance Maintenance Technology Service Funds Operating revenues:

Charges for serv
ices 13,827,679$ 2,999,486$ 4,359,593$ 8,530,463$ 8,213,165$ 37,930,386$ Employee contributions - - 24,130 - - 24,130 Other 206,884 - 3,055,688 462,496 610,000 4,335,068 Total operating rev
enues 14,034,563 2,999,486 7,439,411 8,992,959 8,823,165 42,289,584 Operating expenses:

Salaries and
wages - - - 1,166,646 2,926,262 4,092,908 Depreciation/amortization - - - 3,464,942 635,818 4,100,760 Professional services - - - 125,250 732,945 858,195 Maintenance and supplies - - - 1,638,837 1,663,079 3,301,916 Fleet parts and supplies - - - 500,453 - 500,453 Telecommunication - - - - 194,919 194,919 System maintenance - - - 151,358 - 151,358 Hardware - - - - 381,955 381,955 Software - - - - 541,072 541,072 Workers' compensation 11,588,497 - - - - 11,588,497 Claims and judgments 25,766,286 - - - - 25,766,286 Compensated absences - 2,498,119 - - - 2,498,119 OPEB - - 11,002,082 - - 11,002,082 Other - - 2,425,284 - - 2,425,284 Total operating e
xpenses 37,354,783 2,498,119 13,427,366 7,047,486 7,076,050 67,403,804 Operating income
(loss) (23,320,220) 501,367 (5,987,955) 1,945,473 1,747,115 (25,114,220) Nonoperating revenues:

Invest
ment income 1,241,067 210,890 104,471 610,819 367,830 2,535,077 Net increase in fair value of investments 748,014 124,970 85,176 370,906 220,025 1,549,091 Gain on sale of capital assets - - - 284,690 237 284,927 Interest expense - - - (8,590) (1,394) (9,984) Total nonoperat
ing revenues 1,989,081 335,860 189,647 1,257,825 586,698 4,359,111 Income (loss) bef
ore transfers (21,331,139) 837,227 (5,798,308) 3,203,298 2,333,813 (20,755,109)

Transfers in - - 5,802,500 - - 5,802,500 Change in net p
osition (21,331,139) 837,227 4,192 3,203,298 2,333,813 (14,952,609)

Net position, beginning 16,931,700
(6,859,223) 463,200 32,456,380 10,111,482 53,103,539 Net position, ending (4,399,439)$ (6,021,996)$ 467,392$ 35,659,678$ 12,445,295$ 38,150,930$

CITY OF NEWPORT BEACH
Internal Service
Funds
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended June 30, 2024
207
11-217
334
Total
Insurance Compensated Retiree Equipment Information
Internal
Reserve Absences Insurance Maintenance Technology Service Funds Cash flows from operating activi
ties:

Receipts from user departments 13,801,463$ 2,999,486$ 4,359,641$ 8,532,040$ 8,213,165$ 37,905,795$ Payments to employees (4,522,234) (1,786,620) - (1,213,185) (3,006,263) (10,528,302) Payments to suppliers (9,338,468) - (13,240,726) (2,830,262) (3,541,539) (28,950,995) Other operating cash recei
pts 206,884 - 3,079,818 462,496 610,000 4,359,198 Net cash provided (used) by operati
ng activities 147,645 1,212,866 (5,801,267) 4,951,089 2,275,363 2,785,696 Cash flows from noncapital financin
g activities:

Cash received from other funds -
- 5,802,500 - - 5,802,500 Net cash provided by noncapital fin
ancing activities - - 5,802,500 - - 5,802,500 Cash flows from capital and related fi
nancing activities:

Acquisition of capital assets - - - (3,267,454) (413,241) (3,680,695) Lease liabilities and rel
ated - - - - (63,152) (63,152) Subscription liabil
ities and related - - - (177,102) (193,890) (370,992) Proceeds from sale of capital assets -
- - 284,690 237 284,927 Net cash (used) for capital and rel
ated financing activities - - - (3,159,866) (670,046) (3,829,912) Cash flows from investing activ
ities:

Investment income 1,997,065
331,927 188,657 979,575 584,423 4,081,647 Net cash provided by investing
activities 1,997,065 331,927 188,657 979,575 584,423 4,081,647 Net increase in cash and cash equiv
alents 2,144,710 1,544,793 189,890 2,770,798 2,189,740 8,839,931 Cash and cash equivalents, beg
inning 41,908,438 6,208,195 742,138 17,972,583 10,656,998 77,488,352 Cash and cash equivalents, endi
ng 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$ Reconciliation to the statemen
t of net position:

Cash and investments report
ed on statement of net position 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$ Cash and cash equiv
alents 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$ Reconciliation of operating i
ncome (loss) to net cash
provided by operating
activities:

Operating income (loss) (23,
320,220)$ 501,367$ (5,987,955)$ 1,945,473$ 1,747,115$ (25,114,220)$ Adjustments to reconcile operatin
g income (loss)
to net cash provided by op
erating activities:

Depreciation - - - 3,464,942 635,818 4,100,760 Changes in operati
ng assets and liabilities:
(Increase) decrease in
accounts receivable (26,216) - 48 1,577 - (24,591) (Increase) in i
nventories - - - (25,209) - (25,209) (Increase) decrease in
prepaid items 49,178 - 189,376 (57,837) (60) 180,657 Increase (decrease) i
n accounts payable and accrued
payroll 14,238,236 (245,627) (2,
736) (325,273) (2,111) 13,662,489 Increase in work
ers' compensation 7,054,410 - - - - 7,054,410 Increase in gen
eral liability 2,152,257 - - - - 2,152,257 Increase in comp
ensated absences - 957,126 - - - 957,126 Increase in net
pension liability and deferred cash flows - - - 35,627 71,410 107,037 (Decrease) in net OPEB l
iability and deferred cash flows - - - (88,211) (176,809) (265,020) Total adju
stments 23,467,865 711,499 186,688 3,005,616 528,248 27,899,916 Net cash provi
ded (used) by operating activities 147,645$ 1,212,866$ (5,801,267)$ 4,951,089$ 2,275,363$ 2,785,696$ Noncash investing, capital
, and financing activities:

Net increase in fair val
ue of investments 748,014$ 124,970$ 85,176$ 370,906$ 220,025$ 1,549,091$ Obtaining an intangible right to use lease asset - - - - 9,837 9,837 Total of non
cash activities 748,014$ 124,970$ 85,176$ 370,906$ 229,862$ 1,558,928$

CITY OF NEWPORT BEACH
Combining Statement of Cash
Flows
For the Year Ended June 30, 2024
Internal Service Funds
208
11-218
335

SUPPLEMENTARY INFORMATION
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336

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CUSTODIAL FUNDS

Custodial Funds are used to account for assets held by the City in a trustee capacity, or as an agent for other government entities, private organizations, or individuals.

The City of Newport Beach Custodial Funds are listed below:

The Special Assessment District Fund is used to account for funds received from affected property owners and payable to holders of 1911 Act and 1915 Act special assessment bonds.

The Tourism Business Improvement Fund is used to account for the Newport Beach Tourism Business Improvement District’s special assessment on short term room rental revenue collected by the City for Visit Newport Beach Inc.

The Other Business Improvement Fund is used to account for monies collected from local business districts for district property improvements and business enhancement.

The Police Custodial Fund is used to account for monies received by the City’s police department in a custodial capacity, such as warrants and items pending adjudication.

The Flexible Spending Account Fund is used to account for monies withheld by the City from employees’ wages based on their voluntary enrollment in flexible spending accounts.
211
11-221
338
Custodial Funds
Special Tourism Other Flexible Total
Assessment Business
Business Police Spending Custodial
District Improvement Improvement Custodial Account Funds Assets
Cash and investments 25,705$ 6,420$
5,605$ 247,619$ - $ 285,349$ Restricted cash and investments with fiscal agent 4,245,553 - - - - 4,245,553 Receivable:

Interest 86 - - - - 86 Intergovernmental receivable 45,980 - - - - 45,980 Total assets 4,317,324
6,420 5,605 247,619 - 4,576,968 Liabilities
Due to others 516 6,420 5,605 645 - 13,186 Total liabilities 516
6,420 5,605 645 - 13,186 Net Position
Restricted for:

Individuals, organizations,
and other governments 4,316,808 - - 246,974 - 4,563,782 Total net position 4,316,808$ -$ -$ 246,974$ - $ 4,563,782$

CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Fiduciary
Net Position
June 30, 2024
212
11-222
339
Custodial Funds
Special Tourism Other Flexible Total
Ass
essment Business Business Police Spending Custodial
District Improvement Improvement Custodial Account Funds Additions
Special assessments 3,277,101$ -$ -$ -$ -$ 3,277,101$ Investment earnings 151,966 - - 866 - 152,832 Other 1,080,001 - - 85,059 - 1,165,060 Total additions 4,509,
068 - - 85,925 - 4,594,993 Deductions
Debt service 2,007,651 - - - - 2,007,651 Administrative 96,944 - - - - 96,944 Other - - - 127,861 - 127,861 Total deductions 2,10
4,595 - - 127,861 - 2,232,456 Net increase (decreas
e) in fiduciary net position 2,404,473 - - (41,936) - 2,362,537 Net position, beginning o
f year, as previously reported 1,912,335 - - 288,910 25,728 2,226,973 Restatement for removal of F
lexible Spending Account Fund - - - - (25,728) (25,728) Net position, beginning o
f year, as restated 1,912,335 - - 288,910 - 2,201,245 Net position, end of year 4,
316,808$ -$ -$ 246,974$ - $ 4,563,782$

CITY OF NEWPORT BEACH
Custodial Funds
Combining Sta
tement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2024
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FINANCIAL TRENDS

This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.

The following schedules contain trend information illustrating how the City’s financial performance and well-being have changed over time:
• Net Position by Component
• Changes in Net Position
• Fund Balances of Governmental Funds
• Changes in Fund Balance of Governmental Funds

Sources: Unless otherwise noted, the information in these schedules is derived from the A nnual Comprehensive Financial Reports and underlying accounting records for the relevant years.

217
11-227
344
20151 20162 20173 20184
Net investment in capital assets 2,176,644,408$ 2,193,773,102$ 2,201,552,683$ 2,208,832,391$ Restricted 45,689,702 44,033,677 45,753,736 49,791,908 Unrestricted (150,532,773) (130,468,268) (133,461,197) (122,024,754) 2,071,801,337$ 2,107,338,511$ 2,113,845,222$ 2,136,599,545$ Business-type activities:

Net investment in capital assets 113,914,514$ 117,055,576$ 116,238,944$ 119,375,596$ Unrestricted 21,756,124 23,430,189 28,890,311 29,183,382 135,670,638$ 140,485,765$ 145,129,255$ 148,558,978$ Primary government:

Net investment in capital assets 2,290,558,922$ 2,310,828,678$ 2,317,791,627$ 2,328,207,987$ Restricted 45,689,702 44,033,677 45,753,736 49,791,908 Unrestricted (128,776,649) (107,038,079) (104,570,886) (92,841,372) 2,207,471,975$ 2,247,824,276$ 2,258,974,477$ 2,285,158,523$ 1 2
3 4
5 6
The City of Newport Beach implemented GASB 100 for the fiscal year ended June 30, 2024.

CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2022 data varies from trend due to receipt of revenues such as property taxes and sales taxes that were not spent or restricted by the end of the fiscal year.

The City of Newport Beach implemented GASB 63 and GASB 65 for the fiscal year ended June 30, 2013.

The City of Newport Beach implemented GASB 68 for the fiscal year ended June 30, 2015.

The City of Newport Beach implemented GASB 75 for the fiscal year ended June 30, 2018.

The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022.

Reflects restatement of net position due to unbilled receivables adjustments related to fiscal year ended June 30, 2023.

Fiscal Year
Governmental activities:

Total governmental activities
Total business-type activities
Total primary government
Reflects restatement of net position due to deferred outflow adjustments related to fiscal year ended June 30, 2017.

Reflects restatement of net position due to implementation of GASB 75 in fiscal year ended June 30, 2018.

Reflects restatement of net position due to adjustments for capital assets and compensated absences liability in fiscal year ended June 30, 2019.

Reflects restatement of net position due to compensated absences and deferred outflow adjustments related to fiscal year ended June 30, 2016.

The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023. 218
11-228
345
2019 2020 2021 2022 20236 2024
2,218,040,304$ 2,217,852,660$ 2,227,572,605$ 2,223,773,786$ 2,256,305,577$ 2,275,099,514$ 56,426,811 67,708,225 67,189,020 78,100,496 79,152,428 123,444,563 (102,035,181) (90,214,086) (72,301,558) (8,183,288) 20,117,377 28,001,461 2,172,431,934$ 2,195,346,799$ 2,222,460,067$ 2,293,690,994$ 2,355,575,382$ 2,426,545,538$ 119,346,350$ 120,291,689$ 124,775,772$ 128,244,924$ 131,015,969$ 132,331,781$ 30,331,669 30,276,662 27,039,499 28,559,633 25,105,814 20,202,940 149,678,019$ 150,568,351$ 151,815,271$ 156,804,557$ 156,121,783$ 152,534,721$ 2,337,386,654$ 2,338,144,349$ 2,352,348,377$ 2,352,018,710$ 2,387,321,546$ 2,407,431,295$ 56,426,811 67,708,225 67,189,020 78,100,496 79,152,428 123,444,563 (71,703,512) (59,937,424) (45,262,059) 20,376,345 5 45,223,191 48,204,401 2,322,109,953$ 2,345,915,150$ 2,374,275,338$ 2,450,495,551$ 2,511,697,165$ 2,579,080,259$

CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
219
11-229
346
2015 2016 2017 2018
24,558,041$ 19,335,275$ 20,443,569$ 19,011,099$ 96,945,872 91,046,455 102,494,314 107,647,562 45,774,939 45,443,988 54,039,601 47,615,000 10,073,248 9,943,868 12,056,086 12,377,394 22,418,287 22,700,052 26,583,440 27,307,115 7,711,334 7,615,094 7,472,188 7,381,743 Total governmental activities expenses 207,481,721 196,084,732 223,089,198 221,339,913 21,175,954 21,605,197 22,004,013 23,724,918 3,452,398 3,818,165 4,218,926 4,158,155 Total business-type activities expenses 24,628,352 25,423,362 26,222,939 27,883,073 Total primary government expenses 232,110,073 221,508,094 249,312,137 249,222,986 General government 3,647,210 3,722,557 5,089,123 5,355,887 Public safety 19,386,017 19,108,222 19,899,242 20,733,883 Public works 5,276,991 5,319,510 5,214,426 5,789,579 Community development 8,608,645 8,419,588 10,838,114 9,956,226 Community services 13,667,775 13,964,018 13,653,466 13,974,329 Operating grants and contributions: 10,673,286 17,826,914 11,632,188 11,943,941 Capital grants and contributions: 38,157,665 1 2,717,504 27,993,317 1 1,815,464 99,417,589 71,078,313 94,319,876 69,569,309 Water 27,705,129 24,499,952 25,371,307 26,931,193 Wastewater 3,326,362 3,065,762 3,161,114 3,445,772 Operating grants and contributions: - - - - 31,031,491 27,565,714 28,532,421 30,376,965 130,449,080 98,644,027 122,852,297 99,946,274 (108,064,132) (125,006,419) (128,769,322) (151,770,604) 6,403,139 2,142,352 2,309,482 2,493,892 (101,660,993)$ (122,864,067)$ (126,459,840)$ (149,276,712)$ General revenues and other changes in net position:

Property tax 84,121,461$ 91,516,611$ 96,964,060$ 101,593,290$ Sales tax 24,832,412 33,937,986 33,702,895 36,373,253 Sales tax in-lieu 8,046,424 2,870,474 - - Transient occupancy tax 20,369,158 21,083,199 22,382,361 22,857,737 Business license tax 4,141,282 4,024,386 4,149,016 4,282,935 Franchise tax 4,189,130 4,047,584 4,026,005 4,228,469 Other taxes 354,919 327,009 358,209 3,346,987 Investment income 437,272 584,259 589,001 632,808 Net increase (decrease) in fair value of investments 61,337 376,311 - - Other 3,161,567 4,001,486 2,290,482 3,416,348 Transfers - - (3,500,000) - 149,714,962 162,769,305 160,962,029 176,731,827 Investment income 123,445 216,576 77,752 184,906 Net increase (decrease) in fair value of investments 34,921 148,527 - - Other - 2,375,000 - - Capital contributions - 22,516 - - Transfers - - 3,500,000 - 158,366 2,762,619 3,577,752 184,906 149,873,328 165,531,924 164,539,781 176,916,733 41,650,830 37,762,886 32,192,707 24,961,223 6,561,505 4,904,971 5,887,234 2,678,798 48,212,335$ 42,667,857$ 38,079,941$ 27,640,021$ 1 CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Data varies from trend because of one-time receipt of developer contributions.

Changes in net position
Governmental activities
Business-type activities
Total primary government
Total primary government
Total primary government program revenues
Net revenues (expenses):

Governmental activities
Business-type activities
Total net revenues (expenses)
Governmental activities:

Taxes:

Total governmental activities
Business-type activities:

Total business-type activities
Total governmental activities program revenues
Business-type activities:

Charges for services:

Total business-type activities program revenues
Business-type activities:

Water
Wastewater
Program revenues:

Governmental activities:

Charges for services:

Interest on long-term debt
Expenses:

Governmental activities:

General government
Public safety
Public works
Community development
Community services
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347
2019 2020 2021 2022 2023 2024
20,549,224$ 20,714,050$ 20,177,482$ 19,374,179$ 26,911,510$ 28,392,550$ 111,556,065 119,194,302 119,184,958 104,767,466 121,309,057 151,625,944 53,339,878 60,054,860 63,689,155 65,031,715 75,904,138 88,359,562 11,493,204 12,842,020 12,157,226 9,664,500 13,048,442 16,813,900 27,758,097 26,668,079 28,214,205 24,508,702 27,937,349 33,034,132 7,187,971 7,064,521 7,321,612 6,877,577 6,666,044 6,215,237 231,884,439 246,537,832 250,744,638 230,224,139 271,776,540 324,441,325 26,898,075 27,387,120 28,943,243 27,117,471 30,701,834 37,322,293 4,222,228 4,291,755 5,223,245 4,094,448 5,343,891 6,959,273 31,120,303 31,678,875 34,166,488 31,211,919 36,045,725 44,281,566 263,004,742 278,216,707 284,911,126 261,436,058 307,822,265 368,722,891 5,887,265 3,846,962 2,914,007 3,625,809 12,386,628 15,953,090 21,979,376 22,232,248 22,038,904 23,156,703 26,273,944 27,903,642 5,778,441 5,054,694 5,067,478 7, 538,103 8,770,525 9,397,103
9,902,445 9,599,848 10,491,970 11,119,757 11,269,905 10,849,048 13,556,360 16,936,285 17,601,288 22,302,788 15,753,446 17,370,410 14,021,506 14,659,016 20,361,620 16,800,039 20,131,513 34,497,961 6,638,356 7,352,407 7,658,387 8,693,429 5,809,562 35,646,295 77,763,749 79,681,460 86,133,654 93,236,628 100,395,523 151,617,549 26,843,751 27,100,429 30,739,726 32,104,202 32,033,631 33,842,356 4,069,265 4,110,815 4,618,186 4,825,249 4,666,685 5,274,889 - - - 116,629 - 115,499
30,913,016 31,211,244 35,
357,912 37,046,080 36,700,316 39,232,744 108,676,765 110,892,704 121,491,566 130,282,708 137,095,839 190,850,293 (154,120,690) (166,856,372) (164,610,984) (136,987,511) (171,381,017) (172,823,776) (207,287) (467,631) 1,191,424 5,834,161 654,591 (5,048,823) (154,327,977)$ (167,324,003)$ (163,419,560)$ (131,153,350)$ (170, 726,426)$ (177,872,599)$ 108,365,261$ 113,313,535$ 119,157,057$ 124,335,985$ 138,358,730$ 146,136,873$ 37,168,063 36,232,969 38,956,275 46,164,860 46,552,459 43,444,542 - - - - - -
24,697,446 21,097,384 16,886,197 26,677,331 30,201,649 31,736,961 4,428,440 4,882,419 4,481,349 4,363,145 4,901,385 4,896,557 4,286,496 4,394,156 4,204,224 4,561,278 4,996,526 5,152,384 2,633,720 2,592,369 4,166,549 4,333,071 181,800 203,135 2,644,319 2,621,488 2,603,982 1,995,214 3,208,250 5,834,247 2,234,249 2,520,033 (2,086,189) (6,856,640) (687,766) 3,534,164 3,495,085 2,116,884 3,354,808 2,644,194 5,552,372 2,855,069 - - - - - -
189,953,079 189,771,237 191,724,252 208,218,438 233,265,405 243,793,932 713,970 732,099 525,295 345,218 520,736 893,332
612,358 625,864 (469,799) (1,190,
093) (262,867) 568,429
- - - - - -
- - - - - -
- - - - - -
1,326,328 1,357,963 55,496 (844,
875) 257,869 1,461,761
191,279,407 191,129,200 191,779,748 207,373,563 233,523,274 245,255,693 35,832,389 22,914,865 27,113,268 71,230,927 61,884,388 70,970,156 1,119,041 890,332 1,246,920 4,989,286 912,460 (3,587,062) 36,951,430$ 23,805,197$ 28,360,188$ 76,220,213$ 62,796,848$ 67,383,094$ Fiscal Year

CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
221
11-231
348
2015 2016 2017 2018
General fund:

Nonspendable 15,784,396$ 15,210,896$ 14,434,017$ 14,050,930$ Restricted 5,389,810 3,083,133 3,797,009 4,412,302 Committed 11,847,852 2,726,020 1 10,570,638 2 13,444,487 Assigned 1,421,225 4,201,311 567,132 590,368 Unassigned 55,509,258 56,618,041 60,009,244 61,415,049 Total general fund 89,952,541$ 81,839,401$ 1 89,378,040$ 2 93,913,136$ All other governmental funds:

Nonspendable 4,669,269$ 4,629,781$ 4,666,256$ 4,787,243$ Restricted 29,842,384 33,662,859 31,950,139 38,629,419 Committed 26,159,261 40,248,977 49,510,047 41,731,742 Unassigned (12,495,729) (15,422,984) (6,308,331) (376,162) Total all other governmental funds 48,175,185$ 63,118,633$ 79,818,111$ 84,772,242$ Total all governmental funds 138,127,726$ 144,958,034$ 169,196,151$ 178,685,378$ 1 2
3 4
5 6
Fiscal Year

CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Data varies from trend due to the moving of general fund capital projects to a separate capital project fund.

Data varies from trend due to additional funds set aside for seawall construction and pension-related items.

Data varies from trend due to the relocation of restricted funds to special revenue funds.

Data varies from trend due to the City's absence of fund balance not restricted or committed to be used for specific purposes in fiscal year ended June 30, 2022.

Data varies from trend due to additional funds set aside mainly in the Facilities Financial Planning Reserve Fund and Unrestricted Capital Improvements Fund.

Data varies from trend due to issuance of special Assessment District bonds. 222
11-232
349
2019 2020 2021 2022 2023 2024
13,147,221$ 11,864,115$ 10,637,097$ 9,407,143$ 8,239,567$ 7,052,603$ 4,757,437 5,710,434 4,876,025 - 3 - - 13,335,675 2,210,811 3,235,746 4,429,573 5,465,426 6,786,845 1,199,682 2,598,828 1,489,350 - 4 - - 64,146,123 76,699,284 85,715,180 83,302,665 77,737,532 82,601,740 96,586,138$ 99,083,472$ 105,953,398$ 97,139,381$ 91,442,525$ 96,441,188$ 4,715,545$ 4,646,529$ 4,707,330$ 4,690,430$ 4,650,931$ 4,771,150$ 45,958,167 53,310,518 63,914,627 73,013,208 73,657,409 112,762,753 6 40,732,124 48,032,259 47,863,154 73,243,534 5 78,218,834 81,317,521 (253) (50,137) (136,299) (119,371) (11,625) (229,781) 91,405,583$ 105,939,169$ 116,348,812$ 150,827,801$ 156,515,549$ 198,621,643$ 187,991,721$ 205,022,641$ 222,302,210$ 247,967,182$ 247,958,074$ 295,062,831$

CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Fund Balances
Total General Fund
Total all other Governmental Funds
223
11-233
350
2015 2016 2017 2018
Revenues:

Taxes 146,664,903$ 158,386,385$ 162,184,218$ 171,982,240$ Intergovernmental 11,813,208 17,262,147 17,073,653 16,148,754 Licenses, permits and fees 14,676,754 6,571,123 9,844,908 6,405,668 Charges for services 16,914,210 18,827,991 19,197,065 19,828,786 Fines and forfeitures 3,732,405 3,684,602 3,590,700 3,181,823 Investment income 928,729 1,157,539 772,546 1,143,210
Net increase (decrease) in fair value of investments 177,485 769,460 - - Property income 21,406,667 22,259,425 23,553,188 25,430,217 Donations 22,249,427 4,190,822 16,827,889 414,123
Special assessments - - - -
Other 6,984,418 2,982,924 2,277,322 2,893,770
Total revenues 245,548,206 236,092,418 255,321,489 247,428,591 Expenditures:

Current:

General government 14,060,512 14,629,672 15,086,397 16,099,310 Public safety 94,568,122 96,225,784 98,750,981 109,760,129 Public works 33,694,578 36,000,905 35,961,024 38,012,230 Community development 9,876,706 10,913,205 11,696,779 12,979,656 Community services 20,235,546 21,784,680 23,607,284 25,538,966 Capital outlay 47,169,671 31,934,463 30,822,972 24,054,866 Debt service:

Principal 4,183,000 4,272,000 4,401,000 3,335,000
Interest and fiscal charges 7,957,811 7,839,341 7,704,957 7,617,107 Total expenditures 231,745,946 223,600,050 228,031,394 237,397,264 13,802,260 12,492,368 27,290,095 10,031,327
Other financing sources (uses):

Transfers in 53,281,956 48,523,132 45,342,446 45,308,862 Transfers out (57,431,956) (54,185,192) (49,390,226) (45,850,962) Proceeds from sale - - 995,802 -
Certificates of participation issued - - - -
Premium on certificates of participation issued - - - - Proceeds from loan issuance 1,339,000 - - -
Payment to refunded loan escrow agent (1,339,000) - - - Leases (as lessee) - - - -
Inception of subscription-based IT arrangements - - - - (4,150,000) (5,662,060) (3,051,978) (542,100)
Net change in fund balances 9,652,260$ 6,830,308$ 24,238,117$ 9,489,227$ Debt service as a percentage of

6.6% 7.2% 6.0% 5.3%
1 CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Data varies from trend due to implementation of GASB 96 for the fiscal year ended June 30, 2023. noncapital expenditures
Excess (deficiency) of revenues over (under)
expenditures
Total other financing sources (uses)
Fiscal Year
224
11-234
351
2019 2020 2021 2022 2023 2024
183,455,182$ 182,983,069$ 188,351,057$ 211,259,402$ 226,067,296$ 232,533,623$ 15,818,543 12,672,931 22,233,872 19,683,307 21,080,285 27,715,232 6,302,603 5,783,862 6,566,555 6,995,700 6,719,969 6,688,111 19,472,866 21,125,622 18,434,439 22,897,475 25,214,184 25,217,364 3,347,714 3,509,883 3,923,726 4,191,518 3,892,875 4,195,196 3,490,992 3,765,753 3,201,376 2,756,712 4,525,340 9,386,746 2,938,136 3,477,299 (2,634,682) (8,900,762) (465,873) 4,584,645 26,674,107 25,651,360 28,842,374 33,770,750 35,830,362 41,198,758 402,709 795,561 5,491,871 1,805,249 717,157 6,070,830
- - - 8,086,594 4,948,430 26,843,142 5,173,716 5,950,279 3,504,103 1,441,813 3,412,302 1,175,255 267,076,568 265,715,619 277,914,691 303,987,758 331,942,327 385,608,902 16,769,920 15,968,085 17,154,507 17,397,786 20,680,878 22,007,758 116,054,531 118,290,847 126,006,313 127,590,486 132,441,032 140,132,544 44,132,877 45,730,965 46,817,293 54,293,534 56,046,234 65,532,190 12,310,621 12,612,751 12,996,840 13,021,562 14,735,582 15,734,543 26,372,495 24,474,242 26,745,189 26,421,141 27,558,760 30,060,134 26,347,312 20,376,106 33,728,085 28,603,393 68,434,127 50,776,034 3,470,000 3,576,000 3,247,000 5,138,250 5,296,166 5,335,081 7,428,469 7,265,703 7,306,143 7,141,264 6,908,693 6,698,344 252,886,225 248,294,699 274,001,
370 279,607,416 332,101,472 336,276,628
14,190,343 17,420,920 3,913,321 24,380,342 (159,145) 49,332,274 54,664,532 40,373,
981 70,379,824 76,061,564 128,499,591 97,432,054
(59,548,532) (40,763,981) (65,965,012) (74,776,934) (128,879,043) (103,234,554) - - - - - - - - 7,860,000 - - - - - 1,373,936 - - - - - - - - - - - - - - - - - - - - 3,259,414 - - - - 529,489 1 315,569 (4,884,000) (390,000) 13,648,748 1,284,630 150,037 (2,227,517) 9,306,343$ 17,030,920$ 17,562,069$ 25,664,972$ (9,108)$ 47,104,757$

4.8% 4.8% 4.2% 4.8% 4.5% 4.2%

CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
225
11-235
352

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226
11-236
353

REVENUE CAPACITY

The following schedules present factors affecting the City’s ability to generate its own revenue and its most significant local revenue source, the property tax:
• Assessed Value and Estimated Actual Value of Taxable Property • Direct and Overlapping Property Tax Rates
• Principal Property Tax Payers
• Property Tax Levies and Collections

Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.

227
11-237
354
Fiscal Year
Ended
June 30 Residential Commercial Other Unsecured
Total Taxable
Assessed Value Change
Total Direct
Tax Rate
2015 36,814,891,583 5,007,508,388 1,348,136,131 1,581,520,801 44,752,056,903 5.69% 1.000% 2016 39,263,791,190 5,264,898,550 1,394,764,145 1,465,016,213 47,388,470,098 5.89% 1.000% 2017 41,834,060,284 5,539,551,197 1,398,481,252 1,569,593,832 50,341,686,565 6.23% 1.000% 2018 44,862,969,434 5,953,148,011 1,499,414,812 1,464,683,763 53,780,216,020 6.83% 1.000% 2019 48,246,937,786 6,466,645,074 1,474,416,367 1,513,162,553 57,701,161,781 7.29% 1.000% 2020 50,791,887,238 6,807,750,346 1,552,189,492 1,592,979,478 60,744,806,554 5.27% 1.000% 2021 53,636,707,086 6,979,031,018 1,428,005,141 1,645,923,436 63,689,666,681 4.85% 1.000% 2022 56,171,689,696 7,152,717,180 1,745,857,017 1,509,466,705 66,579,730,598 4.54% 1.000% 2023 60,461,442,254 7,647,078,297 1,489,884,026 1,731,351,434 71,329,756,011 7.13% 1.000% 2024 64,292,506,871 8,048,003,322 1,681,329,931 1,908,193,032 75,930,033,156 6.45% 1.000% NOTE:

Source: HdL, Coren & Cone

CITY OF NEWPORT BEACH
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Secured
228
11-238
355
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ Total City Direct Rate 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Overlapping Rates:

Water districts 0.047 0.047 0.047 0.047 0.047 0.032 0.047 0.047 0.047 0.051

0.182 0.183 0.173 0.176 0.161 0.173 0.186 0.170 0.175 0.158 Total Overlapping Rate 0.229 0.230 0.220 0.223 0.208 0.205 0.233 0.217 0.222 0.209 Total Direct & Overlapping Rate 1.229$ 1.230$ 1.220$ 1.223$ 1.208$ 1.205$ 1.233$ 1.217$ 1.222$ 1.209$ NOTE:

Source: HdL, Coren & Cone

CITY OF NEWPORT BEACH
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of other debt obligations.

School districts
City Direct Rates:

City basic rate
Fiscal Year
229
11-239
356
Taxpayer
Taxable Assessed
Value Rank
Percent of Total
City Taxable
Assessed Value
Taxable Assessed
Value Rank
Percent of Total
City Taxable
Assessed Value
The Irvine Company 833,108,564$ 1 1.10% 1,835,109,685$ 1 4.10% PH Finance LLC 346,858,756 2 0.46% N/A - 0.00%
Villas at Fashion Island LLC 285,563,203 3 0.38% N/A - 0.00% Fashion Island Retail LLC 242,270,076 4 0.32% N/A - 0.00% Newport Center Hotel LLC 232,256,357 5 0.31% N/A - 0.00% HG Newport Owner LLC 193,028,546 6 0.25% N/A - 0.00% 520 Newport Center Drive LLC 190,606,965 7 0.25% N/A - 0.00% Newport Bluffs LLC 173,753,982 8 0.23% 146,556,073 3 0.33% 650 Newport Center Drive LLC 172,594,406 9 0.23% N/A - 0.00% Bay Island Club 159,120,374 10 0.21% 82,471,372 10 0.18% 2,829,161,229$ 3.73% 2,064,137,130$ 4.61%
Source: HdL, Coren & Cone

CITY OF NEWPORT BEACH
Principal Property Taxpayers
Current Year and Nine Years Ago
2024 2015
230
11-240
357

CITY OF NEWPORT BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
Ended
June 30
Taxes Levied
for the Fiscal
Year Amount 1
Percent of
Levy
Collections in
Subsequent
Years 2 Amount
Percent of
Levy
2015 83,843,488 82,191,604 98.03% 642,292 82,833,896 98.80% 2016 84,166,940 81,762,526 97.14% 612,863 82,375,389 97.87% 2017 86,264,321 84,019,053 97.40% 574,124 84,593,177 98.06% 2018 92,139,181 90,279,099 97.98% 581,969 90,861,068 98.61% 2019 98,471,700 96,356,203 97.85% 646,203 97,002,406 98.51% 2020 102,636,451 100,701,002 98.11% 886,688 101,587,690 98.98% 2021 107,647,017 105,781,072 98.27% 862,772 106,643,844 99.07% 2022 113,318,692 110,354,271 97.38% 789,969 111,144,240 98.08% 2023 123,844,578 121,011,910 97.71% 1,020,161 122,032,071 98.54% 2024 129,506,001 126,637,893 97.79% - 3 126,637,893 97.79% 1 2
3 Source: Orange County Auditor Controller's Office
The total amount of Fiscal Year 2024 delinquent taxes collected in subsequent years was not available as of the date the information was collected for the City's Annual Comprehensive Financial Report.

Collected within the Fiscal
Year of Levy Total Collections to Date
Exclusive of penalty charges.

Net collections reflect deductions for refunds and impoundments. 231
11-241
358

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232
11-242
359

DEBT CAPACITY

The following schedules exhibit the City’s levels of outstanding debt over time, to help readers assess the affordability of the current level of outstanding debt, and the City’s ability to issue additional debt:
• Ratios of Outstanding Debt by Type
• Ratios of General Bonded Debt Outstanding
• Direct and Overlapping Debt
• Legal Debt Margin Information

Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.

233
11-243
360

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234
11-244
361
Fiscal
Year
Ended
June 30
Certificates of
Participation 1
Pre-
Annexation
Agreement CDBG Loan Leases 3
Subscription-
based
Information
Technology
Arrangements 3
Total
Governmental
Activities Leases 3
Total Business-type
Activities
Total Primary
Government
Percentage of
Personal
Income 2
Debt Per
Capita 2
2015 117,197,765 2,400,000 1,339,000 - - 120,936,765 - - 120,936,765 1.77% 1,386 2016 114,137,212 1,200,000 1,207,000 - - 116,544,212 - - 116,544,212 1.77% 1,383 2017 110,956,659 - 1,066,000 - - 112,022,659 - - 112,022,659 1.66% 1,319 2018 107,651,106 - 916,000 - - 108,567,106 - - 108,567,106 1.48% 1,245 2019 104,220,553 - 756,000 - - 104,976,553 - - 104,976,553 1.36% 1,204 2020 100,695,000 - 585,000 - - 101,280,000 - - 101,280,000 1.24% 1,181 2021 106,781,026 - 403,000 - - 107,184,026 - - 107,184,026 1.31% 1,248 2022 102,698,895 - 208,000
13,321,040 - 116,227,935 1,512,574 1,512,574 117,740,509 1.34% 1,406 2023 98,616,764 - - 12,274,149 2,235,132 113,126,045 3,820,774 3,820,774 116,946,819 1.27% 1,402 2024 94,389,633 - - 14,339,382 1,832,755 110,561,770 3,776,654 3,776,654 114,338,424 1.22% 1,387

1 2 These ratios are calculated using personal income and population for the prior calendar year. 3 The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.

CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Amounts include any applicable bond premium.

Governmental Activities
Note: This schedule excludes claims and judgments, employee compensated absence, pension, OPEB, and Early Retirement Incentive Plan liabilities. Details regarding the City's outstanding debt can be found in the notes to the financial statements.

Business-type Activities
235
11-245
362
Fiscal Year
Ended
June 30
Certificates of
Participation1
Amounts
Restricted for
Debt Service Total
Percent of
Assessed
Value2
General
Bonded Debt
Per Capita
2015 117,197,765 (2,350,210) 114,847,555 0.26% 1,316 2016 114,137,212 (2,362,904) 111,774,308 0.24% 1,326 2017 110,956,659 (2,364,034) 108,592,625 0.22% 1,279 2018 107,651,106 (2,384,338) 105,266,768 0.20% 1,207 2019 104,220,553 (2,362,228) 101,858,325 0.18% 1,168 2020 100,695,000 (1,159,389) 99,535,611 0.16% 1,160 2021 106,781,026 (2,255,795) 104,525,231 0.16% 1,217 2022 102,698,895 (2,199,363) 100,499,532 0.15% 1,200 2023 98,616,764 (2,183,979) 96,432,785 0.14% 1,156 2024 94,389,633 (2,323,115) 92,066,518 0.12% 1,117 1 2

Assessed value was used because the actual value of taxable property is not readily available in the State of California.

CITY OF NEWPORT BEACH
Ratios of General Bonded Debt
Last Ten Fiscal Years
Amounts include any applicable bond premium.
236
11-246
363
City Net Assessed Valuation: 75,930,033,156$
Percentage
Applicable (1)
Outstanding Debt
6/30/24
Estimated Share of
Overlapping Debt
OVERLAPPING DEBT:

Metropolitan Water District 1.961% 18,210,000$ 357,098$ Coast Community College District 35.244% 886,956,084 312,598,802 Rancho Santiago Community College District 2.678% 154,276,441 4,131,523 Rancho Santiago Community College District School Facilities Improvement District No. 1 5.019% 144,765,000 7,265,755 Laguna Beach Unified School District 14.567% 9,940,000 1,447,960 Laguna Beach Unified School District Community Facilities District No. 98-1 100.000% 6,410,000 6,410,000 Newport Mesa Unified School District 73.630% 215,994,635 159,036,850 Santa Ana Unified School District 6.180% 409,228,633 25,290,330 Irvine Ranch Water District Improvement Districts 2.671% - 100.000% 399,676,768 43,283,102
100.000% 13,300,000 13,300,000
100.000% 8,175,000 8,175,000
City of Newport Beach 1915 Act Bonds 100.000% 37,046,036 37,046,036 Orange County Newport Coast Assessment District No. 01-1 100.000% 3,182,000 3,182,000 Orange County Newport Coast Reassessment District No. 17-1R 100.000% 19,270,000 19,270,000 Orange County General Fund Obligations 9.862% 440,385,000 43,430,769 Orange County Board of Education General Fund Obligations 9.862% 10,030,000 989,159 Coast Community College District General Fund Obligations 35.244% 1,075,000 378,873 Coast Community College District Pension Obligation Bonds 35.244% 925,000 326,007 Santa Ana Unified School District General Fund Obligations 6.180% 42,399,216 2,620,272 TOTAL OVERLAPPING DEBT 2,821,244,813$ 688,539,536$ DIRECT DEBT:

City of Newport Beach Certificates of Participation 100.000% 94,389,633$ 94,389,633$ Workers' compensation payable 100.000% 23,450,563 23,450,563 Claims and judgments payable 100.000% 10,841,318 10,841,318 Compensated absences 100.000% 13,648,166 13,648,166 Leases (3) 100.000% 14,339,382 14,339,382 Subscription-based Information Technology Arrangements (3) 100.000% 1,832,755 1,832,755 TOTAL DIRECT DEBT 158,501,817$ 158,501,817$ TOTAL DIRECT AND OVERLAPPING DEBT 847,041,353$
GROSS COMBINED TOTAL DEBT (2) 847,041,353$
(1)
(2)
(3)
Ratios to 2023-24 Net Assessed Valuation:

Total Overlapping Debt 0.91%
Total Direct Debt ($158,501,817) 0.21%
Gross Combined Total Debt 1.12%
Source: California Municipal Statistics, Inc.

The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.

The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.

Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.

CITY OF NEWPORT BEACH
Direct and Overlapping Debt
June 30, 2024
Bonita Canyon Public Facilities Financing Authority Community Facilities District No. 98-1 California Statewide Community Development Authority Community Facilities District No. 2018-3
237
11-247
364
2015 2016 2017 2018
44,752,056,903$ 47,388,470,098$ 50,341,686,565$ 53,780,216,020$ 25% 25% 25% 25%
11,188,014,226 11,847,117,525 12,585,421,641 13,445,054,005 15% 15% 15% 15%
1,678,202,134 1,777,067,629 1,887,813,246 2,016,758,101 General obligation bonds - - - - 1,678,202,134$ 1,777,067,629$ 1,887,813,246$ 2,016,758,101$ as a percentage of debt limit 0.0% 0.0% 0.0% 0.0%
NOTE:

Source: City Finance Department
The State of California Government Code Section 43605 provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value.

Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.

Adjusted assessed valuation
Debt limit
Total net debt applicable to limit:

Legal debt margin
Conversion percentage
Assessed valuation
Fiscal Year
Total debt applicable to the limit
Debt limit percentage

CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
238
11-248
365
2019 2020 2021 2022 2023 2024
57,701,161,781$ 60,744,806,554$ 63,689,666,681$ 66,579,730,598$ 71,329,756,011$ 75,930,033,156$ 25% 25% 25% 25% 25% 25%
14,425,290,445 15,186,201,639 15,922,416,670 16,644,932,650 17,832,439,003 18,982,508,289 15% 15% 15% 15% 15% 15%
2,163,793,567 2,277,930,246 2,388,362,501 2,496,739,897 2,674,865,850 2,847,376,243 - - - - - - 2,163,793,567$ 2,277,930,246$ 2,388,362,501$ 2,496,739,897$ 2,674,865,850$ 2,847,376,243$

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Fiscal Year

CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
239
11-249
366

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240
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367

DEMOGRAPHIC AND ECONOMIC INFORMATION

The following schedules depict demographic and economic indicators to assist the reader in understanding the socio- economic environment in which the City’s financial activities take place:
• Demographic and Economic Statistics
• Principal Employers

Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.

241
11-251
368
Fiscal Year Population1(1) Personal Income
(in thousands)
Per
Capita
Income(2)
Unemployment
Rate2(3)
2015 87,249 6,848,523 78,494 4.0%
2016 84,270 6,574,071 78,012 3.4%
2017 84,915 6,736,392 79,331 3.1%
2018 87,182 7,334,970 84,134 2.9%
2019 87,180 7,704,445 88,374 2.6%
2020 85,780 8,183,755 95,404 4.6%
2021 85,865 8,175,464 95,213 (4) 6.0%
2022 83,727 8,791,502 105,002 3.0%
2023 83,411 9,219,835 110,535 3.0%
2024 82,419 9,389,008 113,918 3.5%
1 2
Sources:

CITY OF NEWPORT BEACH
Demographic and Economic Statistics
Last Ten Fiscal Years
(4) HdL, Coren & Cone
(2) U.S. Census Bureau - American Community Survey 1-Year Estimates (3) State of California, Employment Development Department (1) California State Department of Finance, E-4 Population Estimates for Cities, Counties and State and E-1 Population and Housing Estimates for Cities, Counties and the State.

Population estimates are as of January 1 of the year shown and do not reflect revised estimates made available after the date the information was collected for the City's Annual Comprehensive Financial Report.

Unemployment rate represents an average of all monthly unemployment rates within a fiscal year.
242
11-252
369
Employer
Number of
Employees Rank
Percent of
Total
Employment
Number of
Employees Rank
Percent of
Total
Employment
Hoag Memorial Hospital 5,483 1 6.78% 4,567 1 5.48% Pacific Life Insurance 1,657 2 2.05% 1,258 2 1.51% PIMCO 1,168 3 1.44% 896 6 1.07%
Irvine Management Company 1,053 4 1.30% N/A 2 - N/A Glidewell Dental 791 5 0.98% 1,098 3 1.32% Tower Semiconductor 790 6 0.98% 692 8 0.83% City of Newport Beach 765 7 0.95% 727 7 0.87% Newport-Mesa Unified School District 750 8 0.93% 909 5 1.09% Balboa Bay Club and Resort 729 9 0.90% 370 10 0.44% Resort at Pelican Hill 679 10 0.84% 927 4 1.11% Marriott Newport Coast Villas 449 11 0.55% N/A 2 - N/A CBRE Inc. 404 12 0.50% N/A 2 - N/A
1 2
Source: Data obtained from companies listed and compiled by City Finance Department.

Figures reflect number of employees of employer at the time the information was collected.

Company listed was unable to provide employee data for 2015.

CITY OF NEWPORT BEACH
Principal Employers1
Current Year and 9 years ago
2024 2015
243
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OPERATING INFORMATION

The following schedules present information on the City’s operations and resources including service and infrastructure data to facilitate the readers’ understanding of how financial statement information relates to the services the City provides and the activities it performs:
• Full Time City Employees by Functions
• Operating Indicators by Function
• Capital Asset Statistics by Function
• Water Sold by Customer Type
• Utility Rates
• Major Water Customers

Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.

245
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246
11-256
373
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General government 78 77 77 79 80 78 80 81 85 94 Public safety 370 374 371 372 375 375 376 376 377 385 Community development 52 52 52 53 53 53 52 53 56 59 Public works 109 104 99 98 96 99 98 98 102 104 Community services 75 79 81 79 78 78 78 78 79 80 Water 31 32 31 33 33 33 33 33 32 34 Wastewater 13 12 13 11 11 11 11 11 11 10 Total 728 730 724 725 726 727 728 730 741 766 Sour
ce: City Finance Department
Function
Fiscal Year

CITY OF NEWPORT BEACH
Full-time City Employees by Function
Last Ten Fiscal Years
247
11-257
374
2015 2016 2017 2018
Police:
3,472 3,158 3,178 3,266
59,753 64,762 69,246 56,685
Fire:
305 300 247 248
1,281 1,201 1,216 1,307
General Services:
2,711 1,890 1,439 1,403
27,175 27,000 20,490 22,925
Recreation & Senior Services:
303,152 305,000 425,000 437,751
13,740 14,000 13,500 13,071
Water:
187 194 229 210

16.39 11.66 13.80 14.07
Sewer:
20 17 41 137
260 250 202 211
Library Services:
1,610,818 1,575,000 1,464,640 1,424,594
1 2
3 Source: City of Newport Beach

CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Data varies with trend due to COVID-19 restrictions being lifted in 2022.

Fire Inspections
Adult Arrests
Parking Citations Issued
Fire Responses
Fiscal Year
Data varies with trend due to inclusion of responses to fires, hazardous materials, medical and other emergencies.

Data varies with trend due to COVID-19 restrictions in 2021.

Street Patching (tons of mix)
Sidewalk Repair (square feet)
Co-Sponsored Youth Organization Attendance
Senior Transportation Services
New Connections
Average Daily Consumption (hundred cubic feet)
New Connections
Miles of Pipe Cleaned
Library Circulation of Materials
248
11-258
375
2019 2020 2021 2022 2023 2024
3,520 3,093 2,872 2,650 2,800 2,615 67,048 73,372 86,439 83,307 85,003 86,002 209 11,913 1 12,204 13,251 13,486 13,493 1,033 2,842 475 2 3,015 3 2,807 2,824 1,402 913 920 901 903 739 14,840 11,729 7,805 13,590 12,885 16,069 469,959 439,954 455,442 392,605 454,418 527,754 13,386 9,300 6,287 8,805 10,048 10,190 210 256 160 252 184 176

13.75 13.44 14.87 14.28 11.06 10.77 46 10 25 3 12 9 196 221 240 209 178 192 1,376,041 1,084,206 1,043,629 1,195,151 1,172,951 1,213,486

CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
249
11-259
376
2015 2016 2017 2018
Police:

Stations 1 1 1 1
Fire:

Fire Stations 8 8 8 8
Lifeguard Headquarters 1 1 1 1
Public works:

Streets (miles) 395 399 400 400 Streetlights 5,977 5,978 5,978 5,978 Traffic Signals 808 808 808 808 Recreation & Senior Services:

Parks 64 64 64 64 Community Centers (includes leased property) 14 15 15 15 Aquatic Center 1 1 1 1 Water:

Water Mains (miles) 299.58 299.77 300.64 300.30 Maximum Daily Capacity (thousands of gallons) 27,800 27,800 27,800 27,800 Wastewater:

Sanitary Sewers (miles) 202.64 202.75 202.72 203.56 Storm Sewers (miles) 94.14 92.08 94.74 95.12 Library Services:

Libraries 4 4 4 4 Source: City of Newport Beach
Fiscal Year

CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
250
11-260
377
2019 2020 2021 2022 2023 2024
1 1 1 1 1 1
8 8 8 8 8 8
1 1 1 1 1 1
400 400 400 400 401 399 5,971 5,972 5,973 5,974 5,974 5,974 808 808 808 808 808 808 65 65 65 66 66 66 15 15 15 14 14 15 1 1 1 1 1 1 300.88 300.82 301.23 301.13 301.48 301.39 27,800 27,800 27,800 27,800 27,800 27,800 203.99 204.10 204.13 204.30 204.72 204.81

95.35 95.89 96.18 97.37 97.81 104.28 4 4 4 4 4 4 Fiscal Year

CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
251
11-261
378
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Type of Customer:

Residential 3,853,566 3,072,589 3,564,203 3,603,927 3,439,655 3,747,408 3,811,231 3,714,134 3,242,477 3,154,529 Commercial 2,560,620 1,847,372 2,142,952 2,201,254 2,075,812 2,081,860 2,231,809 2,078,199 1,728,975 1,698,963 Government 396,605 263,116 305,214 289,738 256,398 270,638 299,442 314,128 256,850 224,058 Total 6,810,791 5,183,077 6,012,369 6,094,919 5,771,865 6,099,906 6,342,482 6,106,461 5,228,302 5,077,550 Total direct rate
per 100 cubic ft. 3.08$ 3.08$ 3.08$ 3.08$ 3.08$ 3.11$ 1 3.35$ 2 3.60$ 3 3.87$ 4 4.16$ 5 1 Reflects increase in commodity rate effective January 1, 2020 2 Reflects increase in commodity rate effective January 1, 2021 3 Reflects increase in commodity rate effective January 1, 2022 4 Reflects increase in commodity rate effective January 1, 2023 5 Reflects increase in commodity rate effective January 1, 2024 Source: City Utilities Department
Fiscal Year

CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
252
11-262
379
Fiscal Year
Ended
June 30
Monthly
Base Rate
Rate per
100 cubic ft
2015 21.77 3.43
2016 21.77 3.43
2017 21.77 3.43
2018 23.73 3.46
2019 24.34 3.50
2020 28.09 3.57
2021 30.25 3.85
2022 32.03 4.14
2023 33.77 4.41
2024 37.64 4.69
1 Source: City Revenue Division

CITY OF NEWPORT BEACH
Utility Rates1
Last Ten Fiscal Years
Rates are based on 5/8" or 3/4" meter,
which are the standard household meter
sizes. Rates include sewer service. The
City charges an excess-use rate above
normal demand.
253
11-263
380
Water Customer Water Charges Rank
Percent of Total
Water Revenues Water Charges Rank
Percent of Total
Water Revenues
Irvine Company Apartment 805,949$ 1 2.50% 532,674$ 1 1 1.95% Irvine Company Office 605,192 2 1.88% 474,979 1 1 1.74% Hoag Memorial Hospital 467,613 3 1.45% 302,746 4 1.11% Newport Beach Country Club 368,577 4 1.14% 325,207 3 1.19% Big Canyon Country Club 344,111 5 1.07% 295,721 2 1.08% UDR Newport Beach 342,458 6 1.06% 251,069 8 0.92% Newport-Mesa Unified School District 316,461 7 0.98% 269,852 6 0.99% Irvine Company Retail 270,791 8 0.84% 174,528 10 0.64% Bluffs Homeowners Association 263,595 9 0.82% 273,137 7 1.00% Pacific View - Pierce Bros. 235,776 10 0.73% 187,880 9 0.69% Park Newport Ltd 195,097 11 0.61% 284,543 5 1.04% Newport Dunes Resort 175,223 12 0.54% 122,840 16 0.45% Villa Balboa Community Association 137,137 13 0.43% 132,508 18 0.42% De Anza Corp 133,394 14 0.41% 89,228 22 0.33% 690 Hotel LLC 127,832 15 0.40% N/A 2 - N/A
4,789,205$ 14.87% 3,716,911$ 13.57%
1 2
Source: City Revenue Division

CITY OF NEWPORT BEACH
Major Water Customers
Current Year and Nine Years Ago
2024 2015
Company listed operated under The Irvine Company in 2015.

Company listed was established in 2021 therefore, no 2015 information was available. 254
11-264
381

11-265
382
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
(949) 644-3123
www.newportbeachca.gov/acfr
11-266
383

Attachment B
Auditor’s Required Communications with the Audit Committee

11-267
384
1 REQUIRED AUDIT COMMUNICATIONS

The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Newport Beach (City) as of and for the year ended June 30, 2024, and have issued our report thereon dated December 30, 2024. Professional standards require that we advise you of the following matters during our audit.

Our Responsibility in Relation to the Financial Statement Audit

As communicated in our engagement letter dated July 9, 2024, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Planned Scope and Timing of the Audit

We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence

The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence.

11-268
385
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California

2 We identified self-review threats to independence as a result of non-attest services provided.

Those non -attest services included assisting in preparation of the financial statements, recording journal entries detected during the audit process , assisting in updating infrastructure records and assisting in preparation of the State Controller’s Report . To mitigate the risk, management has reviewed the financial statements and compared amounts to the accounting records, reviewed proposed journal entries to s upporting documentation and posted the journal entries to the accounting records. Additionally, management has reviewed the updates to infrastructure records and compared amounts to underlying supporting documentation. Furthermore, management has reviewe d the State Controller’s Report and agreed the amounts to its accounting records.

Significant Risks Identified

We have identified the following significant risks:

• Risk of errors in capital asset records: We evaluated the accuracy of depreciation and accumulated depreciation by performing a full recalculation by capital asset.

• Risk of valuation as a result a transfer of the other post-employment benefits (OPEB) trust: We reviewed the transfer of the trust noting the complete closure of CERBT and opening of the trust with PARS.

• Compliance with federal grant requirements. We plan to review the City’s Schedule of Expenditure of Federal Awards and select major programs to test for compliance with federal grant requirements. This work is scheduled to begin in late January.

Qualitative Aspects of the City’s Significant Accounting Practices

Significant Accounting Policies

Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements are:

• Management’s estimate of the net pension liability.
• Management’s estimate of the net OPEB liability.
11-269
386
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California

3 • Management’s estimates of the claims payable liabilities related to general liability and workers’ compensation claims.
• Useful lives of depreciable assets.

Management’s estimate of the pension liability, OPEB liability and claims payable liabilit ies are based on actuarial valuation reports . Management’s estimate of the useful lives of assets are based on actual experience with the use of similar assets over time. We evaluated the key factors and assumptions used to develop the pension liability, OPEB liability , claims payable liabilities and useful lives of assets and determined they are reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.

Financial Statement Disclosures

Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to pensions in Note 11 and OPEB in Note 12. The financial statement disclosures are neutral, consistent, and clear.

Significant Unusual Transactions

For purposes of this communication, professional standards require us to communicate to you significant unusual transactions identified during our audit. There were no significant unusual transactions identified as a result of our audit procedures.

Significant Difficulties Encountered During the Audit

We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements

For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of manageme nt. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected all identified misstatements. Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future -period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit.

In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units.

11-270
387
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California

4 Di
sagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to t
he City’s financial statements or
the auditor’s report. No
such disagreements arose during the course of the audit.

Representations Req
uested from Management
We h
ave r
equested an
d r
eceived c
ertain wr
itten r
epresentations f
rom ma
nagement, wh
ich
are included in a se
parate l
etter dated D
ecember 3
0, 2024.

Management Consultations with Other Accountants
In s
ome c
ases, ma
nagement m
ay d
ecide t
o c
onsult wi
th o
ther a
ccountants ab
out au
diting
and accounting matters. Man
agement informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other
Si
gnificant Matters Findings, or Issues
In t
he n
ormal c
ourse o
f o
ur p
rofessional a
ssociation wi
th t
he Ci
ty, w
e g
enerally d
iscuss a
var
iety of matters, including the application of accounting principles and auditing standards, significant e
vents o
r t
ransactions t
hat o
ccurred d
uring t
he ye
ar, o
perating an
d r
egulatory
conditions affecting the entity, and operational plans and strategies that may affect the risks of m
aterial m
isstatement. No
ne o
f t
he m
atters d
iscussed r
esulted i
n a c
ondition t
o o
ur
retention as the City’s auditors.

Other I
nformation Included in the Annual Comprehensive Financial Report Pursuant t
o p
rofessional s
tandards, o
ur r
esponsibility a
s au
ditors f
or o
ther i
nformation,
whether financial or nonfinancial, included in the City’s annual report, does not extend beyond the i
nformation i
dentified i
n t
he au
dit r
eport, an
d we ar
e n
ot r
equired t
o p
erform an
y
procedures t
o c
orroborate s
uch o
ther i
nformation. H
owever, i
n a
ccordance wi
th such
sta
ndards, w
e h
ave r
ead t
he i
nformation an
d c
onsidered wh
ether suc
h i
nformation, o
r t
he
manner of its presentation, was materially inconsistent with its presentation in the financial statements.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact.

No
thing came to our attention that caused us to believe that such i
nformation, o
r i
ts m
anner o
f p
resentation, i
s ma
terially i
nconsistent wi
th t
he
information, or manner of its presentation, appearing in the financial statements.

This r
eport i
s intended solely for the information and use of Ci
ty Council an
d management of
the C
ity an
d i
s n
ot i
ntended t
o b
e, an
d s
hould n
ot b
e, u
sed b
y an
yone o
ther t
han t
hese
specified parties.

Irvine, California
December 30, 2024
11-271
388
Attachment C
Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
11-272
389
1 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, the business - type activities, each major fund, and the aggregate remaining fund information of the City of Newport Beach (City), as of and for the year ended June 30, 20 24, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 30, 2024.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

11-273
390
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California

2 Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determinat ion of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
December 30, 2024

11-274
391
February 11, 2025, City Council Agenda Comments
The following comments on items on the Newport Beach City Council agenda are submitted by:

Jim Mosher ( [email protected] ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item VII. MATTERS WHICH COUNCILMEMBERS HAVE ASKED TO BE

PLACED ON A FUTURE AGENDA
The matter presented here is development of a proposal to restructure the City’s Aviation Committee. While that committee might well benefit from a restructuring, it should be noted that the root cause of its current dysfunction is not its current structure, but a failure to work within it.

That includes not filling vacancies and having last met on July 15, 2024.

Item 1. Minutes for the January 28, 2025 City Council Meeting The passage shown in italics below is from the draft minutes with a suggested correction shown in strikeout underline format. The page number refers to Volume 66.

Page 251 ends

Harp stated that as to Item 8 is not, case law allows charter cities to do things that general law cities cannot, so concern about a gift of public funds does not apply.” [See video. City Attorney Harp did not say that approval of Item 8 could not be regarded as a gift of public funds. He only said that the prohibition against making gifts of public funds did not apply to charter cities.1 The difference in meaning is substantial.] 1 The case law alluded to by City Attorney Harp, holding that charter cities are not bound by the California Constitutional provision prohibiting the state Legislature from authorizing gifts of public funds (Article XVI, Sec. 6), presumably includes Los Angeles Gas & Elec. Corp. v. City of Los Angeles, 188 Cal. 307 (1922) and Tevis v. City & County of San Francisco, 43 Cal. 2d 190 (1954).

That exemption from a restraint on the Legislature does not, however, automatically exempt charter cities from the Article XI, Sec. 10(a) prohibition against “a local government body” providing extra compensation for work already performed. It can be debated whether the Article XI, Sec. 5(a) power of charter cities to, with respect to municipal affairs, “supersede all laws inconsistent” with their charter is so sweeping as to allow it to evade even a Constitutional restriction that says it applies to all local agencies. But even if they could, neither our Charter nor our Municipal Code appear to contain any provision overriding Article XI, Sec. 10(a). And absent such a provision, the Council would not seem free to do something the state Constitution forbids, namely amending the CR&R contract to provide extra compensation for work already provided. Instead, that extra payment should have been regarded and identified as a voluntary gift outside the contract.

In my own comments, I mentioned a California Supreme Court opinion that, for public employment contracts, created a limited exception to the prohibition against retroactive adjustments to compensation.

The case in question is Jarvis v. Cory, 28 Cal.3d 562 (1980) which permitted adjustments in compensation retroactive to the date on which salary negotiations began or a prior employment agreement expired. But the reasoning was very specific to public employees and would not apply to other contracts, such as that with CR&R (if it did, Article XI, Sec. 10(a) would be meaningless).

In summary, there seems (shockingly) to be no law preventing the City of Newport Beach government from making gifts of the public’s funds. But there is a law, indeed a Constitutional mandate, preventing it from retroactively changing the compensation provisions of a municipal contract. And the voters would seem to have a right to expect their officials to respect that law.

Received After Agenda Printed
February 11, 2025
Written Comments
392
February 11, 2025, City Council agenda comments - Jim Mosher Page 2 of 4 Item 4. East Coast Highway and San Miguel Drive Pavement Rehabilitation

and

Evening

Canyon

Road

Drainage

Improvements

–

Notice

Completion

for

Contract

No.

8925-2

(23R11)
The Location Maps do not appear to include the “ pavement rehabilitation work at the intersections

Jamboree

Road

Bristol

Street

North

and

South
”

added

change

order.

Item 11. Financial Statement Audit Results and Related Communication

for

the

Fiscal

Year

Ended

June

30,

2024
As I commented to the Finance Committee at their meeting on January 23rd, the statement near the

top

page

11-17

that

Newport

Beach

has

“21-square-mile

harbor”

seems

suspect.

The
City’s Demographics and Statistics page indicates the “Harbor Waters” comrise just 844 acres or 1.3 square miles. As I also pointed out, in the organization chart on page 11-31, “Building & Fire Code of Appeals” should

“Building

Fire

Board

Appeals”

and

the

lines

suggesting

the

City

Clerk

and

City

Attorney

report

the

City

Manager

(rather

than

the

City

Council)

seem

little

misleading.

Item 12. Acceptance of the National Highway Traffic Safety Administration

(NHTSA)

Illegal

Passing

Stopped

School

Buses-High

Visibility

Enforcement

Pilot

Project
On agenda packet page 12-5, under “Reporting,” Attachment B says “ A deployment report template

attached
.”

But

not.

Seeing what the City is being asked to report would clarify what the City is expected to do in fulfillment

the

grant.

Item 13. Ordinance No. 2025-1: Granting Non-Exclusive Commercial Solid

Waste

Franchise

Agreements
The proposed ordinance refers in at least four places (pages 13-76 through 13-79) to an attached

Exhibit

“A,”

but

attachment

included.

assume

the

same

the

attachment

the

preceding

resolution.

Will

attached

ordinance

when

archived?
Also, at the end of Section 1 (page 13-76) the ordinance refers to “ The Franchisees' continuing obligations

pursuant

Section

23(J)

(Continuing

Obligations)

the

2017

Franchise

Agreement.
”

these

new

franchisees

have

continuing

obligations

under

agreement

they

were

not

party

to?

Item 14. Resolution No. 2025-8: Amending the Schedule of Rents, Fines

and

Fees

Provide

Pass-Through

Credit

Card

Transaction

Fee

Charged

Third

Parties

Directly

the

Consumer
Not fully understanding how credit card transactions work, I am unable to understand what is being

proposed

what

the

language

adopted

(on

page

14-9)

means.

393
February 11, 2025, City Council agenda comments - Jim Mosher Page 3 of 4 I assume that when the City charges someone, say, $100, and the customer offers to pay the $100

credit

card,

the

City

receives

less

than

$100

due

processing

fees

charged

the

City.

Since Item 14 on April 23, 2024, staff has been authorized to correct for this by adding a 2.85% surcharge to the bill. In other words, if the bill was $100, the customer offering to pay by credit card

would

asked

pay

$102.85.

The present staff report indicates the transactions are not all the same, and the actual fee may be

less

than

2.85%

(although

doesn’t

say

how

much

less

might

be).

I suspect staff is seeking permission to adjust the surcharge to reflect the actual transaction charges

expected

particular

credit

call

billing

(assuming

the

City

knows

advance

what

the

charge

will

be?),

and

this

will

reflected

the

amount

the

customer

asked

pay

(as

the

example

above,

but

with

number

different

from

2.85%)
However, the proposed language I see on page 14-9 says “ 2.85%, or pass-through, as applicable
”

with

footnote

reading

“
When

the

City

charged

for

processing

the

credit

card

transaction,

the

City's

fee

the

customer

2.85%

offset

the

cost

the

City.

When

the

customer

charged

directly

process

the

transaction,

the

fee

pass

through

directly

the

customer
.”
Both the meaning and intent of this is baffling to me. Doesn’t the staff report indicate the City is always charged a processing fee, so the surcharge would

always

2.85%

regardless

varying

fees?

How

does

this

address

the

problem

stated

the

staff

report

varying

fees?
And what does the second sentence mean? Under what circumstances is the customer, rather than

the

City,

charged

“to

process

the

transaction”?

How

that

charge

“passed

through”?

Why

would

the

City

charging

the

customer

“convenience

fee”

equal

cost

penalty

the

customer

privately

paying

their

creditor?

And what happens if there are charges borne by both the City and the customer? Which sentence

prevails.

If the intent is that “a convenience fee will be added to the bill so that the net payment received by

the

City

(after

correcting

for

third-party

processing

charges)

will

equal

the

amount

owed,”

would

seem

best

simply

say

that.

Even then, if every credit card customer may be charged a different convenience fee percentage,

will

any

them

know

advance

what

their

percentage

is?

they

have

try

pay

credit

card

discover

what

their

bill

will

be?
I am also puzzled why, under “Noticing” on page 14-3, entities such as Southern California Edison,

Southern

California

Gas

Company,

and

AT&T

were

singled

out

for

mailed

notices.

While

appreciate

that

many

residents

Newport

Beach

make

private

payments

them

credit

card,

this

action

would

not

seem

relevant

that.

those

utilities

make

payments

the

City

credit

card?

394
February 11, 2025, City Council agenda comments - Jim Mosher Page 4 of 4 Finally, under “Fiscal Impact,” the report says “ In fiscal year 2024, the City incurred approximately

$2.1

million

credit

card

processing

fees
.”

Has

this

number

been

corrected

reflect

any

recovery

resulting

from

the

2.85%

surcharge

authorized

April

23,

2024?

Should the present action not be taken, what would be the net annual processing cost to the City

just

the

fixed

2.85%

surcharge

credit

card

payments

were

fully

implemented?

Item 15. Resolution No. 2025-9: Approving a Request to Waive City Council

Policy

L-2,

Driveway

Approaches,

and

Coastal

Development

Permit

for

Duplex

3601

Lake

Avenue

Page 15 ends

not

hyphenated.

Page 15 ends

and

findings

Exhibit

"A"
”

(as

well

subject

the

conditions

Exhibit

B).

Page 15 ends

its

adoption
”

does

not

seem

accurate,

least

with

respect

the

validity

the

CDP.

This

property

appears

the

California

Coastal

Commission’s

appeal

area,

and

such,

the

CDP

does

not

become

effective

until

the

City

has

reported

its

action

the

CCC

and

the

deadline

for

filing

appeal

them

has

expired.

Page 15 ends

from

the

established

grade,
”

since

Table

1 on

page

15-4

says

the

highest

point

28’

8”.

Page 15 ends

referenced

the

preceding

Fact

C.2.

Item 16. Employment Agreement for City of Newport Beach Police Chief
The staff report refers to NBMC Section 2.24.100 (Selection of Fire and Police Chiefs), which says, among other things, that “ The City Manager shall appoint a member, or members, of the Board

serve

qualifications

appraisal

panel

within

the

qualifications

appraisal

process
”
(where “Board” refers to the City’s Civil Service Board). As best I can tell, neither the staff report nor the Agreement indicate if this happened, and if it did, which CSB members served on the qualifications

appraisal

panel.

The report also does not explain why staff is proposing a delayed effective date of February 22. Also, the Exhibit A (Police Chief Job Description) provided on page 16-20 is dated more than two

years

ago.

Are

the

salary

ranges

printed

still

current?

395

12-1

NEWPORT BEACH

City Council Staff Report

COUNCIL STAFF REPORT

CITY OF

February 11, 2025
Agenda Item No. 12

ABSTRACT:

The Newport Beach Police Department (NBPD) seeks acceptance of a grant totaling $57,800 from the National Highway Traffic Safety Administration (NHTSA) Illegal Passing of Stopped School Buses-High Visibility Enforcement Pilot Project.

RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Accept a $57,800 NHTSA Illegal Passing of School Buses-High Visibility Enforcement Pilot Project award granted to the Newport Beach Police Department by Toxcell LLC.; and
c) Approve Budget Amendment No. 25-052 increasing NBPD revenue estimates and expenditure appropriations by $57,800.

DISCUSSION:

Through a NHTSA-funded research project, Toxcel LLC is developing a toolkit to help law enforcement agencies (LEA) implement high visibility enforcement (HVE) campaigns to address the illegal passing of stopped school buses. HVE combines enforcement, visibility elements, and a publicity strategy to educate the public and promote voluntary compliance with the law. While HVE campaigns are frequently used to address traffic safety concerns such as seat belt usage and impaired driving, this will be the first NHTSA- sponsored HVE campaign focused on illegal school bus passing.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David Miner, Acting Chief of Police - 949-644-3701, [email protected]
PREPARED BY: Sabrina Fabbri, Traffic Sergeant - 949-644-3743, [email protected] TITLE: Acceptance of the National Highway Traffic Safety Administration (NHTSA) Illegal Passing of Stopped School Buses -High Visibility Enforcement Pilot Project
396
Acceptance of the National Highway Traffic Safety Administration (NHTSA) Illegal Passing of Stopped School Buses-High Visibility Enforcement Pilot Project February 11, 2025

Page 2 ends

12-2
These are preventable incidents that put children at significant risk; injuries and fatalities to children occur more often outside or near a school bus than inside due to motorists failing to heed the stop-arm warning.

The objective of this effort is to pilot test a toolkit that was developed by Toxcel to help law enforcement agencies conduct HVE for the illegal passing of stopped school buses.

The pilot test will involve selected law enforcement agencies conducting HVE between January 2025 and June 2025, with the toolkit available to guide them in their HVE efforts.

Agencies will be reimbursed for their HVE efforts related to this project, will be required to submit deployment reports, and will be asked for input on the toolkit at the end of the pilot period that may be used to enhance or improve the toolkit. When finalized, the toolkit will be made broadly available.

FISCAL IMPACT:

The Budget Amendment appropriates $57,800 in additional revenue from the NHTSA HVE Pilot Project and $57,800 in increased expenditure appropriations. The revenue will be posted to a designated account for the pilot proje ct in the Police Department Traffic Division, 01035354 -431453-G2550, and staffing will be expensed to accounts 01035354-713002-G2550 and 01035354 -727016-G2550 for overtime and associated compensation benefits.

ENVIRONMENTAL REVIEW:

Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.

NOTICING:

The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).

ATTACHMENTS:

Attachment A – Budget Amendment
Attachment B – NHTSA Grant Agreement

397
12-3

ATTACHMENT A
398

Page 1 of 3 ends

toXcel
7140 Heritage Village Plaza
Gainesville, VA 20155
Phone: (703) 754-0248 Fax: (703) 310-6950
January 7, 2024
Officer Isaac Furnari
Newport Beach Police Department
Newport Beach, CA 92660
RE: Illegal Passing of Stopped School Buses – High Visibility Enforcement Pilot Participation Selection/Memorandum of Understanding under NHTSA Contract 22C-000002 Dear Officer Furnari,
Thank you for applying for the National Highway Traffic Safety Administration (NHTSA) Illegal Passing of Stopped School Buses – High Visibility Enforcement Pilot Project. Upon review of your application, the Newport Beach Police Department has been selected to receive reimbursement of up to $57,800 for conducting high visibility enforcement (HVE) focused on the illegal passing of stopped school buses.

Toxcel LLC is managing this effort under contract to NHTSA (Contract 22C-000002). All communication for this project will go through Toxcel and Toxcel will handle all funding reimbursements.

Please review the attached information and return a signed memorandum of understanding (see page 3 for the MOU) to me ([email protected]) as soon as possible. Once signed you can begin reimbursable HVE efforts to prevent the illegal passing of stopped school buses from January to June 2025. The attached information outlines directions for submitting invoices for reimbursement and deployment reporting requirements.

I am excited to work with you to help stop the illegal passing of stopped school buses in Newport Beach.

Please do not hesitate to contact me if you have any questions.

Sincerely,
Jennifer Symoun
Vice President, Engineering and Behavioral Sciences
Toxcel LLC
703-754-0248 x8208
[email protected]
Attachment B
12-4
399

Page 2 of 3 ends

Background
Through a NHTSA-funded research project, Toxcel LLC is developing a toolkit to help law enforcement agencies (LEA) implement high visibility enforcement (HVE) campaigns to address the illegal passing of stopped school buses. HVE combines enforcement, visibility elements, and a publicity strategy to educate the public and promote voluntary compliance with the law. While HVE campaigns are frequently used to address traffic safety concerns such as seat belt usage and impaired driving, this will be the first NHTSA-sponsored HVE campaign focused on illegal school bus passing.

According to the National Association of State Directors of Pupil Transportation, approximately 242,000 motorists across the United States illegally passed a stopped school bus in a single day during the 2022- 2023 school year. Projected across a 180-day school year, that is more than 43.5 million stop-arm violations. These are preventable incidents that put children at significant risk; injuries and fatalities to children occur more often outside or near a school bus than inside due to motorists failing to heed the stop-arm warning.

Objective
The objective of this effort is to pilot test a toolkit that was developed by Toxcel to help law enforcement agencies conduct HVE for the illegal passing of stopped school buses. The pilot test will involve selected law enforcement agencies conducting HVE between January-June 2025, with the toolkit available to guide them in their HVE efforts. Agencies will be reimbursed for their HVE efforts related to this project, will be required to submit deployment reports, and will be asked for input on the toolkit at the end of the pilot period that may be used to enhance or improve the toolkit. When finalized, the toolkit will be made broadly available.

Implementation Support Processes and Procedures
Eligible Expenses
Participating LEAs will be reimbursed up to their budgeted amount for officer overtime associated with the HVE deployments and administrative time to log and report the HVE data, as well as any related equipment costs that do not exceed 15% of the overall HVE budget.

Reporting
A deployment report template is attached. Deployment reports are preferred by the Friday of the week following the deployments (e.g., The report for deployments that occur during week 1 of the month is due by Friday of week 2). Invoices, supporting receipts, and proof of overtime rates are due bi-monthly, to align with the Newport Beach Police Department’s payroll schedule. If necessary, deployment reports can also be submitted on a bi-monthly schedule with the invoices. Reimbursement is dependent upon Toxcel’s receipt of the deployment reports. Submit all information to [email protected].

Reimbursement will occur within 30 days of receipt of the invoice if all requested information is provided.

The report includes a summary section at the beginning to summarize all deployments that occurred in the reporting week, as well as separate sections to document information about each individual deployment. Complete this report with as much information and detail as possible.

Invoicing
An invoice template is attached. This invoice must be submitted along with receipts for any purchases and proof of overtime rates (such as paystubs. Personal information can be redacted). Instructions for completing the invoice are included on the first tab of the file. The invoice template on the second tab.

Timeframe
HVE deployments may begin upon receipt of the signed MOU and should be completed by June 30, 2025.

Attachment B
12-5
400

Page 3 of 3 ends

PLEASE PROVIDE ON AGENCY LETTERHEAD (MINUS THIS HEADER)

DATE

Jennifer Symoun
toXcel
Illegal Passing of Stopped School Buses – High Visibility Enforcement Pilot Support Coordinator (under contract to NHTSA)
7140 Heritage Village Plaza
Gainesville, VA 20155

Dear Jennifer:

The Newport Beach Police Department agrees to follow the requirements for being reimbursed up to $58,000 for allowable expenses for conducting high visibility enforcement (HVE) focused on the illegal passing of stopped school buses. We will provide deployment reports by the Friday of the week after each week of HVE deployments. Invoices and supporting backup for invoiced amounts will be submitted bi-monthly. We understand that information and lessons learned captured from our efforts may be included in updating the Toolkit and the project final report and we will have the opportunity to review the Toolkit and report prior to its publishing by NHTSA.

We are committed to this effort and able to allocate the time and resources required to receive funding assistance.

Our primary point of contact for this effort is:

Name
Agency
Address
Phone
Email

Sincerely,

x
(Signature)

NAME:
(Type or Print)

TITLE:

Attachment B
12-6
401
February 11, 2025, City Council Agenda Comments
The following comments on items on the Newport Beach City Council agenda are submitted by:

Jim Mosher ( [email protected] ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item VII. MATTERS WHICH COUNCILMEMBERS HAVE ASKED TO BE

That includes not filling vacancies and having last met on July 15, 2024.

Page 251 ends

Received After Agenda Printed
February 11, 2025
Written Comments
402
February 11, 2025, City Council agenda comments - Jim Mosher Page 2 of 4 Item 4. East Coast Highway and San Miguel Drive Pavement Rehabilitation

and

Evening

Canyon

Road

Drainage

Improvements

–

Notice

Completion

for

Contract

No.

8925-2

(23R11)
The Location Maps do not appear to include the “ pavement rehabilitation work at the intersections

Jamboree

Road

Bristol

Street

North

and

South
”

added

change

order.

Item 11. Financial Statement Audit Results and Related Communication

for

the

Fiscal

Year

Ended

June

30,

2024
As I commented to the Finance Committee at their meeting on January 23rd, the statement near the

top

page

11-17

that

Newport

Beach

has

“21-square-mile

harbor”

seems

suspect.

“Building

Fire

Board

Appeals”

and

the

lines

suggesting

the

City

Clerk

and

City

Attorney

report

the

City

Manager

(rather

than

the

City

Council)

seem

little

misleading.

Item 12. Acceptance of the National Highway Traffic Safety Administration

(NHTSA)

Illegal

Passing

Stopped

School

Buses-High

Visibility

Enforcement

Pilot

Project
On agenda packet page 12-5, under “Reporting,” Attachment B says “ A deployment report template

attached
.”

But

not.

Seeing what the City is being asked to report would clarify what the City is expected to do in fulfillment

the

grant.

Item 13. Ordinance No. 2025-1: Granting Non-Exclusive Commercial Solid

Waste

Franchise

Agreements
The proposed ordinance refers in at least four places (pages 13-76 through 13-79) to an attached

Exhibit

“A,”

but

attachment

included.

assume

the

same

the

attachment

the

preceding

resolution.

Will

attached

ordinance

when

archived?
Also, at the end of Section 1 (page 13-76) the ordinance refers to “ The Franchisees' continuing obligations

pursuant

Section

23(J)

(Continuing

Obligations)

the

2017

Franchise

Agreement.
”

these

new

franchisees

have

continuing

obligations

under

agreement

they

were

not

party

to?

Item 14. Resolution No. 2025-8: Amending the Schedule of Rents, Fines

and

Fees

Provide

Pass-Through

Credit

Card

Transaction

Fee

Charged

Third

Parties

Directly

the

Consumer
Not fully understanding how credit card transactions work, I am unable to understand what is being

proposed

what

the

language

adopted

(on

page

14-9)

means.

403
February 11, 2025, City Council agenda comments - Jim Mosher Page 3 of 4 I assume that when the City charges someone, say, $100, and the customer offers to pay the $100

credit

card,

the

City

receives

less

than

$100

due

processing

fees

charged

the

City.

would

asked

pay

$102.85.

The present staff report indicates the transactions are not all the same, and the actual fee may be

less

than

2.85%

(although

doesn’t

say

how

much

less

might

be).

I suspect staff is seeking permission to adjust the surcharge to reflect the actual transaction charges

expected

particular

credit

call

billing

(assuming

the

City

knows

advance

what

the

charge

will

be?),

and

this

will

reflected

the

amount

the

customer

asked

pay

(as

the

example

above,

but

with

number

different

from

2.85%)
However, the proposed language I see on page 14-9 says “ 2.85%, or pass-through, as applicable
”

with

footnote

reading

“
When

the

City

charged

for

processing

the

credit

card

transaction,

the

City's

fee

the

customer

2.85%

offset

the

cost

the

City.

When

the

customer

charged

directly

process

the

transaction,

the

fee

pass

through

directly

the

customer
.”
Both the meaning and intent of this is baffling to me. Doesn’t the staff report indicate the City is always charged a processing fee, so the surcharge would

always

2.85%

regardless

varying

fees?

How

does

this

address

the

problem

stated

the

staff

report

varying

fees?
And what does the second sentence mean? Under what circumstances is the customer, rather than

the

City,

charged

“to

process

the

transaction”?

How

that

charge

“passed

through”?

Why

would

the

City

charging

the

customer

“convenience

fee”

equal

cost

penalty

the

customer

privately

paying

their

creditor?

And what happens if there are charges borne by both the City and the customer? Which sentence

prevails.

If the intent is that “a convenience fee will be added to the bill so that the net payment received by

the

City

(after

correcting

for

third-party

processing

charges)

will

equal

the

amount

owed,”

would

seem

best

simply

say

that.

Even then, if every credit card customer may be charged a different convenience fee percentage,

will

any

them

know

advance

what

their

percentage

is?

they

have

try

pay

credit

card

discover

what

their

bill

will

be?
I am also puzzled why, under “Noticing” on page 14-3, entities such as Southern California Edison,

Southern

California

Gas

Company,

and

AT&T

were

singled

out

for

mailed

notices.

While

appreciate

that

many

residents

Newport

Beach

make

private

payments

them

credit

card,

this

action

would

not

seem

relevant

that.

those

utilities

make

payments

the

City

credit

card?

404
February 11, 2025, City Council agenda comments - Jim Mosher Page 4 of 4 Finally, under “Fiscal Impact,” the report says “ In fiscal year 2024, the City incurred approximately

$2.1

million

credit

card

processing

fees
.”

Has

this

number

been

corrected

reflect

any

recovery

resulting

from

the

2.85%

surcharge

authorized

April

23,

2024?

Should the present action not be taken, what would be the net annual processing cost to the City

just

the

fixed

2.85%

surcharge

credit

card

payments

were

fully

implemented?

Item 15. Resolution No. 2025-9: Approving a Request to Waive City Council

Policy

L-2,

Driveway

Approaches,

and

Coastal

Development

Permit

for

Duplex

3601

Lake

Avenue

Page 15 ends

not

hyphenated.

Page 15 ends

and

findings

Exhibit

"A"
”

(as

well

subject

the

conditions

Exhibit

B).

Page 15 ends

its

adoption
”

does

not

seem

accurate,

least

with

respect

the

validity

the

CDP.

This

property

appears

the

California

Coastal

Commission’s

appeal

area,

and

such,

the

CDP

does

not

become

effective

until

the

City

has

reported

its

action

the

CCC

and

the

deadline

for

filing

appeal

them

has

expired.

Page 15 ends

from

the

established

grade,
”

since

Table

1 on

page

15-4

says

the

highest

point

28’

8”.

Page 15 ends

referenced

the

preceding

Fact

C.2.

serve

qualifications

appraisal

panel

within

the

qualifications

appraisal

panel.

The report also does not explain why staff is proposing a delayed effective date of February 22. Also, the Exhibit A (Police Chief Job Description) provided on page 16-20 is dated more than two

years

ago.

Are

the

salary

ranges

printed

still

current?

405

13-1

NEWPORT BEACH

City Council Staff Report

COUNCIL STAFF REPORT

CITY OF

February 11, 2025
Agenda Item No. 13

ABSTRACT:

On January 28, 2025, the City Council adopted Resolution No. 2025-6, declaring its intention to conduct a public hearing on February 11, 202 5, to consider granting Non-Exclusive Commercial Solid Waste Franchises to BC Hauling and Demolition, California Waste Services LLC , and Tim Greenleaf Engineering . Following the public hearing, the City Council will consider an ordinance granting franchises to these entities.

RECOMMENDATIONS:
a) Conduct a public hearing to consider the award of Non -Exclusive Commercial Solid Waste Franchises pursuant to Resolution No. 2025-6;
b) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and
c) Waive full reading, direct the City Clerk to read by title only, and introduce Ordinance No. 2025-1, An Ordinance of the City Council of the City of Newport Beach, California, Granting Non -Exclusive Franchise Agreements for Commercial Solid Waste and Divertible Materials Handling Services Within the City of Newport Beach, and pass to second reading on February 25, 2025.

DISCUSSION:

On January 28, 2025, the City Council passed Resolution No. 2025-6, declaring its intent to conduct a public hearing to consider granting non -exclusive commercial solid waste and divertible materials handling franchises to BC Hauling and Demolition, California Waste Services LLC and Tim Greenleaf Engineering. Staff received and reviewed franchise applications from the three entities listed in Resolution No. 202 5-6 (Attachment A).

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David A. Webb, Public Works Director - 949-644-3311, [email protected]
PREPARED BY: Charles Springer, Senior Management Analyst - 949-718-3466, [email protected]
TITLE: Ordinance No. 2025 -1: Granting Non -Exclusive Commercial Solid Waste Franchise Agreements
406
Ordinance No. 2025-1: Granting Non-Exclusive
Commercial Solid Waste Franchise Agreements
February 11, 2025

Page 2 ends

13-2

Based upon staff ’s review, staff believes the se three franchise applica nts meet the requirements of Newport Beach Municipal Code Section 12.63.080 and request the City Council approve or conditionally approve their requested Non-Exclusive Commercial Solid Waste Franchise Agreements.

Following the public hearing, City Council may introduce an ordinance granting a franchise to each entity and pass it to second reading on February 25, 2025 . If the City Council determines that changes should be made to the terms and conditions of a franchise, a new resolution of intention must be adopted, and the proceedings repeated.

The franchises become effective 30 days after the ordinance adoption, on March 27, 2025, contingent on the execution of the franchise agreement s and approval of each firm’s insurance and bond requirements. The franchises expire October 7, 2027.

FISCAL IMPACT:

Approved f ranchisees that are granted Non -Exclusive Franchise Agreement s for Commercial Solid Waste Handling Services within the city must pay a franchise fee to the City of Newport Beach equal to 16% of the gross receipts of all commercial franchise services provided by the franchisee in the city.

ENVIRONMENTAL REVIEW:

Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Reg ulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.

NOTICING:

The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).

ATTACHMENTS:

Attachment A – Resolution No. 2025-6
Attachment B – Ordinance No. 2025-1
407
RESOLUTION NO. 2025- 6

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF NEWPORT BEACH, CALIFORNIA, DECLARING ITS

INTENTION TO CONDUCT A PUBLIC HEARING TO

CONSIDER GRANTING NON- EXCLUSIVE

COMMERCIAL SOLID WASTE AND DIVERTIBLE

MATERIALS HANDLING FRANCHISES
WHEREAS, the City Council of the City of Newport Beach (" City") finds and determines that the collection of municipal solid waste and divertible materials, including recyclable materials, food scraps, green waste, wood waste, construction and demolition debris, and all other materials that can be diverted from landfill disposal ( collectively Commercial Solid Waste") generated within the City is a vital public service; WHEREAS, the City Council further finds and determines that the collection, transportation, storage, and disposal of municipal solid waste and the collection, transportation, processing, and diversion of processable municipal solid waste and divertible materials (" Commercial Franchise Services") is a matter of great public concern because improper control of such matters subjects the City to potential liability, damages and penalties, and may create a public nuisance, air pollution, fire hazard, infestation and other problems affecting the public health, safety and welfare; WHEREAS, the non- exclusive franchises for the use of public streets to provide Commercial Franchise Services promotes the public health, safety and welfare by providing permanence and stability among those businesses wishing to provide such service and accountability to the City for compliance with current and future state mandates;
WHEREAS, on October 22, 2019, the City Council approved a new model franchise agreement in compliance with state law (" 2020 Franchise"), which expires in the year 2027;
WHEREAS, the City has received applications from: ( 1) BC Hauling & Demolition, Inc.; ( 2) California Waste Services LLC, and ( 3) Greenleaf Engineering ( collectively, Proposed Grantees"), who wish to perform work under the 2020 Franchise; WHEREAS, pursuant to Article XIII ( Franchises) of the City Charter, Chapter

12. 63 ( Solid Waste Management) of the Newport Beach Municipal Code (" NBMC"), and California Public Resources Code Sections 40059, 49300, and 49500 through 49523, or any successor statutes, the City is authorized to enter into non-exclusive franchise agreements for Commercial Franchise Services with private solid waste haulers;

ATTACHMENT A
13-3
408
Resolution No. 2025- 6

Page 2 ends

WHEREAS, pursuant to City Charter Section 1301 ( Resolution of Intention.

Notice and Public Hearing), the City Council, prior to granting any franchise, shall pass a resolution declaring its intention to grant a franchise, stating the name of the proposed grantee( s), the character of the franchise, and the terms and conditions upon which it is proposed to be granted; and
WHEREAS, such resolution shall fix and set forth the day, hour and place when and where any personshaving any interest therein or any objection to the granting thereof may appear before the City Council and be heard thereon.

NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows:

Section 1: The City Council does hereby declare its intention to grant non- exclusive franchises, subject to the following general terms and conditions (" Non - Exclusive Franchise"):
a. Effective date. March 27, 2025;
b. Franchise fees. Sixteen percent ( 16%) of gross monthly receipts. Five and one- half percent ( 5. 5%), shall be earmarked for the purposes of indemnifying and holding the City harmless from environmental liability associated with the franchisee's operations in the City. This portion of the franchise fee shall be paid into the City's Environmental Liability Fund. One- half percent ( 0. 5%) shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling Element; C. Term. March 27, 2025, to October 7, 2027;
d. Rates. The City shall not set franchisee' s bin rates; e. Indemnification. Franchisee shall indemnify and hold City harmless from penalties and damagesfor failure to meet state recycling requirements with respectto the portion of the Commercial Solid Waste stream collected by franchisee; f. Diversion requirements. Franchisee shall divert the minimum amounts required by state law, of all processable municipal solid waste, recyclable materials, food scraps, green waste, and construction and demolition debris collected by commercial franchisee;
13-4
409
Resolution No. 2025- 6

Page 3 of 5 ends

g. Disposal requirements. Franchisee shall dispose of Commercial Solid Waste, not otherwise diverted, in Orange County landfills pursuant to the City' s waste disposal agreement with the County of Orange. City maintains the right to designate disposal facilities to be used by franchisee;
h. Billing. Franchisee shall be responsible for all billing and collection for its accounts;
i. Termination. A Franchise may be terminated pursuant to Section 12.63. 140 Solid Waste Management - Termination) of the NBMC if the Council finds that franchisee has failed to comply with, or to do anything required of the franchisee by Chapter 12.63 Solid Waste Management) of the NBMC; has violated any provision of the ordinance grantingthe franchise; hasviolatedany provisionof the 2020 Franchiseor any federal, state or local law or regulation applicable to franchisee' s operations under the franchise, or if any provisionof Chapter12.63 (SolidWasteManagement) ofthe NBMCor the 2020 Franchise is repealed or becomes or is declared to be invalid, and the City Council expressly finds that such provision constitutes a material consideration to the granting or continuation of such Non - Exclusive Franchise;
j. Application requirements. Prior to obtaining the 2020 Franchise, franchisee shall designate the specific Commercial Franchise Services for which it desires to apply and shall demonstrate competence in and compliance with the City' s insurance, equipment, and diversion requirements with respect to those Commercial Franchise Services,
k. Public education. Franchisee shall meet City' s requirements to implement recycling, diversion, and source reduction public education activities; I. Recycling/ diversion programs. Franchisee shall implement and provide recycling and diversion programs for all customers subject to California State Assembly Bills 939, 341, and 1826, Senate Bill 1383, and the California Green Building Standards Code, codified in the California Code of Regulations Title 24, Part 11 (" CALGreen"), M. Hauler representative. Franchisee shall designate a representative to assist in implementing State -imposed recycling and diversion programs; and n. Compliance. Franchisee shall comply with all state, federal laws and regulations, terms and conditions of the 2020 Franchise, the City Charter and the NBMC. 13-5
410
Resolution No. 2025- 6

Page 4 of 5 ends

Section 2: The City intends to grant the 2020 Franchiseto the following entities:
a. BC Hauling & Demolition, Inc.
b. California Waste Services LLC
C. Greenleaf Engineering
Section 3: The City Council shall conduct a public hearing on February 11, 2025, at 4: 00 p.m., or as soon thereafter as the matter may be heard, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California, to consider granting the Proposed Granteesthe 2020 Franchise. Persons who have an interest in or objection to the granting of the 2020 Franchise to the Proposed Grantees may appear before the City Council and be heard at that date and time.

Section 4: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act (" CEQA") pursuant to Sections 15301 and 15308 of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because the resolution does not change nor expand existing solid waste operations and facilities within the City. This resolution is also consistentwith the goals of California State Assembly Bills 939, 341, and 1826, Senate Bill 1383 and The California Solid Waste Management Act, CALGreen, as well as the objectives of the City' s Source Reduction and Recycling Element.

Section 5: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution.

Section 6: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.
13-6
411
Resolution No. 2025- 6

Page 5 of 5 ends

Section 7: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution.

Section 8: Pursuant to City Charter Section 1301, this resolution shall be published in the City's official newspaper within fifteen (15) days of its adoption and at least ten ( 10) days prior to February 11, 2025.

ADOPTED this 28th day of January, 2025.

ATTEST:

APPROVED AS TO FORM:

CITY ATTORNEY' S OFFICE
C, 1
Aarolln C. Harp
City Attorney
Attachment: 2020 Non - Exclusive Commercial Franchise Agreement Sample 13-7
412

NON- EXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF

NEWPORT BEACH AND FOR COMMERCIAL

SOLID WASTE AND DIVERTIBLE MATERIALS HANDLING SERVICES
This Non- exclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services (" Agreement") is entered into this day of 2022 (" Effective Date") by and between the City of Newport Beach, a California municipal corporation and charter city organized and existing under the laws of the State of California (" City"), and , a [ insert name and type of business entity e.g. corporation, LLC, partnership] (" Franchisee") ( City and Franchisee may collectively be referred to as " Parties"), whose address is and is made with
reference to the following:

PPrITAI S
This Agreement is entered into on the basis of the following facts:

A. Assembly Bill (" AB") 939 ( the California Integrated Solid Waste Management Act of 1989, hereinafter the " Act"; Public Resources Code Sections 40000 et seq.) requires the City to divert from landfill disposal a minimum of fifty percent ( 50%) of all municipal solid waste generated within the City.

B. In 2011, the Act was amended by AB 341 to establish a statewide goal of diverting from landfills seventy-five percent ( 75%) of all municipal solid waste by 2020 and required the City, on or before July 1, 2012, to provide a commercial recycling program.

C. AB 341 also requires all businesses generating more than four ( 4) cubic yards per week of commercial municipal solid waste and all multifamily dwellings of five 5) units or more to arrange for recycling services by July 1, 2012.

D. In 2014, the Act was further amended by AB 1826 to require the City, on or before January 1, 2016, to provide a diversion program for collection and diversion of food scraps and green waste.

E. AB 1826 also requires commercial generators of certain quantities of food scraps and green waste to participate in a diversion program beginning on a date between April 1, 2016 and January 1, 2019, depending on the quantity of waste generated. Some smaller commercial generators are required by CalRecycle to participate on or after January 1, 2020.

F. The City has received written notification from CalRecycle of its intention to enforce the deadlines for implementation of AB 341 and AB 1826 programs within the City as required by the Act; therefore, it is important that Franchisee implement and maintain successful AB 341 an AB 1826 diversion programs for all commercial customers as required by the Act, to the satisfaction of both the City and CalRecycle. 13-8
413
G. Pursuant to Article XIII of the City Charter, Code Chapter 12.63, and Public Resources Code Sections 40059, 49300, and 49500 through 49523, or any successor statutes, the City is authorized to enter into non-exclusive franchise agreements for commercial solid waste and divertible materials handling services.

H. On October 10, 2017, the City Council of the City of Newport Beach (" City Council") adopted Ordinance No. 2017- 16, An Ordinance of the City Council of the City of Newport Beach, California, Granting Non -Exclusive Solid Waste Franchises to Provide Commercial Solid Waste Handling Services Within the City of Newport Beach.

I. As part of its adoption of Ordinance No. 2017-16, the City entered into a number of nonexclusive franchise agreements allowing solid waste haulers to operate in the City.

J. On October 22, 2019, the City Council approved revisions to the nonexclusive franchise agreement with solid waste haulers to improve procedures for compliance with Assembly Bills 341 and 1826. The revised nonexclusive franchise agreement also extended the term for an additional two ( 2) years.

K. Pursuant to Code Chapter 12. 63, Franchisee has filed a franchise application with the City to operate under the new Nonexclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services.

L. The Parties now wish to terminate the franchise agreement adopted pursuant to Ordinance No. 2017- 16 and enter into a new Nonexclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services.

ALTERNATIVE, IF THEY DO NOT HAVE A CURRENT FRANCHISE
AGREEMENT, THEN L. WOULD READ, " The Parties now wish to enter into a Nonexclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services."
M. City has reviewed Franchisee' s application and Franchisee has represented it is capable of providing collection services for commercial recyclable materials, food scraps, green waste, municipal solid waste, and/or construction and demolition debris in the City.

N. Pursuant to this Agreement, City desires to authorize Franchisee to provide those non- exclusive commercial services for collection, transportation, delivery, and disposal of Municipal Solid Waste and/ or collection, transportation, processing and diversion of recyclable materials, food scraps, green waste, wood waste, and construction and demolition debris as requested in Franchisee' s application and for which Franchisee has demonstrated capability.

O. The City Council has determined that this grant of a non-exclusive franchise is in the public interest.

Non- exclusive Franchise Agreement Page 2
13-9
414
NOW, THEREFORE, the City and Franchisee do hereby agree as follows:

SECTION 1. GRANT OF FRANCHISE
A. By Ordinance No. 202_- XX, City has granted to Franchisee a non- exclusive Franchise authorizing Franchisee to provide Commercial Franchise Services within all or anypartof the Cityandto usethe publicstreetsand publicright-of-waysfor suchpurpose.

Franchisee acknowledges that the Franchise is not exclusive and that the Franchise is subject to all provisions of applicable law, including, but not limited to, Article XIII of the City Charter, Ordinance No. 202_- XX, Code Chapter 12. 63, and the terms and conditions of this Agreement.

B. Upon the Effective Date of this Agreement, the parties agree that any prior authorization relating to the provision of Commercial Franchise Services within all or any part of the City arising under and pursuant to any prior franchise issued to Franchisee shall be deemed to be abandoned and of no further force or effect except the Franchisee' s obligation( s) to comply with the Diversion requirements set forth in Sections 12 through 15, the Continuing Obligations set forth in Section 23(J), or any other obligations specified in the franchise agreement granted pursuant to Ordinance No. 2017-16.

SECTION 2. TERM OF FRANCHISE
This Agreement shall commence on the Effective Date, and shall terminate on the Termination Date, unless terminated earlier as set forth herein.

SECTION 3. DEFINITIONS
AB 341 Generator" means all Municipal Solid Waste generators required by AB 341 ( Public Resources Code Section 41780. 01) to divert Recyclable Materials generated on -site from Disposal including ( A) all businesses located and operating within the City, and the responsible party, property owners, owners, operators, property managers, tenants and lessees of same, that generate four (4) or more cubic yards of Municipal Solid Waste per week; including but not limited to, retail stores, restaurants, offices, supermarkets, convenience stores, malls, strip malls, service businesses, hospitals, assisted living facilities, and federal, state and local government facilities; ( B) Multifamily Dwellings consisting of five (5) or more units regardless of the amount of Municipal Solid Waste generated; ( C) the City, its facilities, its non-residential properties, and ( D) special events that take place in the City that generate four ( 4) or more cubic yards of municipal solid waste per event whether or not sponsored by the City.

AB 1826 Generator" means all food -generating businesses within the City, and the responsible parties, property owners, owners, operators, property managers, tenants and lessees of same, that generate four (4) or more cubic yards of Municipal Solid Waste per week and are required by AB 1826, as codified in Public Resources Code Section 42649. 82, to divert all Food Scraps generated on -site from Disposal; including but not limited to, all restaurants, cafeterias, hospitals, and supermarkets; ( B) all non - food - generating businesses and the responsible parties, property owners, owners, operators, property managers, tenants and lessees of same, that generate four ( 4) or more cubic Non- exclusive Franchise Agreement Page 3
13-10
415
yards of Municipal Solid Waste per week and that generate Green Waste and/or Wood Waste ( C) all Multifamily Dwellings consisting of five ( 5) or more units regardless of the amount of Municipal Solid Waste generated; ( D) federal, state and local government facilities, schools, the City, its facilities, and its non-residential properties; and (E) special events that take place within the City that generate four ( 4) or more cubic yards of municipal solid waste per event, whether or not sponsored by the City. As of the effective date of this Agreement, the threshold amount of Municipal Solid Waste provided for in Public Resources Code Section 42649. 81 is four ( 4) or more cubic yards of Municipal Solid Waste per week on or after January 1, 2020. If CalRecycle changes the quantities of Municipal Solid Waste necessary to be considered an AB 1826 Generator, the definition of an AB 1826 Generator shall be automatically amended to reflect these new quantities.

Act" means the California Integrated Waste Management Act of 1989 ( Public Resources Code Sections 40000, et seq.) as amended and as implemented by regulations of CalRecycle ( or its successor agency) and the Air Resources Board (or its successor agency).

Alternative Daily Cover" or " ADC" means cover material other than earthen material placed on the surface of the active face of a Municipal Solid Waste Landfill at the end of each operating day to control vectors, flies, fires, odors, blowing litter and scavenging. Prior to 2014, Green Waste was included in the list of CalRecycle- approved ADC materials and use of Green Waste for this purpose was counted as "Diversion" for purposes of the Act. AB 1594, passed and signed into law in 2014, phases out the use of Green Waste as ADC effective January 1, 2020. As of January 1, 2020, no Green Waste Collected within the City will not be used as ADC and Green Waste must be diverted for processing such as mulching, Composting, as feedstock for Anaerobic Digestion or other CalRecycle- approved means that counts as Diversion.

Anaerobic Digestate" or " Digestate" means the material left at the conclusion of a biological process that decomposes organic matter in an enclosed environment with little or no oxygen, resulting in a biogas and a liquid/solid stream called Digestate ( CCR Section 17896. 2( a)( 6)). Any Digestate created from Green Waste, Food Scraps or other organic materials Collected within the City must be further processed at a permitted Composting Facility or utilized in another manner that is fully permitted and approved by all federal, state and local regulatory agencies, including but not limited to CalRecycle, and that is considered as " Diversion" by CalRecycle for purposes of the Act.

Anaerobic Digestion" means a biological process that decomposes organic matter in an environment with little or no oxygen, resulting in a biogas and a liquid/ solid stream called Anaerobic Digestate. Such activity takes place at an "Anaerobic Digestion Facility." Bin( s)" means open top rectangular containers with wheels, with attached plastic or metal lids, used for storage of Municipal Solid Waste, Recyclable Materials, Green Waste, Food Scraps, Construction and Demolition Debris or other materials that are Collected by Franchisees or other Persons authorized to Collect and transport such materials within City.

Non- exclusive Franchise Agreement Page 4
13-11
416
Bioengineered Feedstock" means a mixture of materials utilized in Wastewater Treatment Plants (WWTP' s) or publically- owned treatment works ( POTW' s) to produce biogas. ( This process is also referred to as "wet anaerobic digestion.") Bioengineered Feedstock may include primary and secondary sludge, greases from the WWTP grease trap, and organic materials such as Food Scraps from businesses and households or other organic materials from industries that have been pre-treated and liquefied to the required consistency.

Bioengineered Feedstock Facility" means a Processing Facility that accepts Food Scraps and other Bioengineered Feedstock, chops, macerates or otherwise size - reduces the incoming materials, mixes the material with liquid and produces a slurry which is then transported or otherwise delivered to a Wastewater Treatment Plant or similar facility that uses Bioengineered Feedstock to produce methane,
CalRecycle" means the California Department of Resources Recycling and Recovery, the successor agency to the former California Integrated Waste Management Board.

Can" means a receptacle for Municipal Solid Waste, Recyclable Materials, Green Waste, Food Scraps or wood provided by the Customer and Collected using manual instead of automated) means of Collection.

Cart" means a plastic wheeled Container with a hinged lid used to store Municipal Solid Waste, Recyclable Materials, Green Waste or Food Scraps that is Collected by an automated or semi - automated vehicle.

CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( 42 USC § 9601 et seq.).

City Council" means the City Council of the City of Newport Beach.

City Manager," " Finance Director," and " Public Works Director" mean the City Manager, Finance Director and Public Works Director of the City or their designee.

Clean Materials Recovery Facility (" Clean MRF") means a materials recovery facility (" MRF'), or that portion of a MRF, that processes Recyclable Materials that have been separated from Municipal Solid Waste such as Single Material Recyclables and Single Stream Recyclable Materials, containing no more than the maximum Residue or contamination allowed by CalRecycle ( 10% Residue).

Code" means the Newport Beach Municipal Code.

Collect" or " Collection" means taking physical possession of Commercial Solid Waste, or other materials, from Customers and transporting such materials by means of a motor vehicle, or other means, to a MRF, Compost Facility, other Organics Processing Facility, Construction and Demolition Debris Processing Facility, transfer station or Landfill.

Non- exclusive Franchise Agreement Page 5
13-12
417
Commercial Franchise Services" means the services provided by Franchisees pursuant to the terms and conditions of the Franchise and includes the Collection, transportation, storage, and Disposal of Municipal Solid Waste and the Collection, transportation, Processing and Diversion of Processible Municipal Solid Waste, Recyclable Materials, Green Waste, Wood Waste, Food Scraps and/ or Construction and Demolition Debris by private solid waste enterprises, and includes, without limitation, the placement of Commercial Solid Waste and Divertible Materials Containers on public property.

Commercial Premises" means all occupied real property in the City used for commercial purposes including, without limitation, wholesale or retail establishments, restaurants, other food establishments, bars, stores, shops, offices, mechanized manufacturing facilities, repair, research and development or professional services, sports or recreational facilities, industrial facilities, federal, state and local government facilities, schools, Multi -Family Dwellings that receive centralized Collection service and construction and demolition sites.

Compactor" means an enclosed rectangular or square metal container containing a ramrod to condense and compress the contents, and is typically used to store Municipal Solid Waste, Green Waste, Recyclable Materials, Food Scraps or Construction and Demolition Debris. Compactors may be small ( 3 or 4 cubic yards) for use on smaller Commercial Premises or large ( 10, 20, 30 or cubic yards) for use at large Commercial Premises such as supermarkets, hotels, and large retail stores or at construction sites. A special Roll Off vehicle equipped with hooks and a winch to pull the Compactor on to the railed bed of the vehicle is used to Collect Compactors and transport them to a Landfill or to a Processing Facility.

Compost" means the product resulting from the controlled biological decomposition of organic wastes which are separated from the Municipal Solid Waste streamat the pointof generationand includesFoodScraps, GreenWaste, and wood that are not hazardous wastes.

Compost Facility" means a facility that processes one (1) or more of the following:

Food Scraps, Green Waste, wood and food -soiled fiber such as paper napkins and paper towels, by means of outdoor windrow composting, aerated static pile composting, covered composting, vermiculture or other outdoor composting methods or covered composting with use of either finished compost or fiber, synthetic or other type( s) of cover( s) applied to the compost piles.

Composting" means the controlled microbial degradation of organic materials yielding a safe and nuisance -free finished product called Compost, a soil amendment suitable for incorporating into topsoil and for growing plants.

Construction and Demolition Debris" means all inert material of every nature, description or kind, which has resulted from the building or demolition of a structure, pavements, sidewalks, curbs, gutters and other concrete structures, including all lumber scraps, shingles, plaster, sheetrock, packaging, rubble, brick, stone, concrete, asphalt, Non- exclusive Franchise Agreement Page 6
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dirt, rock and other building material. A facility that accepts Construction and Demolition Debris for separation and further processing to prepare materials for sale or re -use (such as removingnails and screwsfrom wood, or grinding of concreteand asphalt) and then markets the materials for re -use is a " Construction and Demolition Debris Processing Facility."
Container( s)" means any object designed and used to hold or store Municipal Solid Waste, Recyclable Materials, Food Scraps, Green Waste, or Construction and Demolition Debris to be Collected by Franchisees. Containers include Carts, Bins, open top Roll Off Boxes, and Compactors.

Contamination" means materials that are not specified for Collection in particular Containers or for processing at either a Clean MRF or a Dirty MRF, which would either interfere with such processing and/or reduce the quality and value of the Recovered Materials. For example, for purposes of Collection, metals and plastics would constitute Contamination" if placed in a Food Scrap Container and tree trimmings would constitute Contamination" if placed in a Recyclable Materials Container.

Customer" means the owner, occupant, manager or user of premises at which Municipal Solid Waste, Recyclable Materials, Green Waste, Wood Waste, Food Scraps or Construction and Demolition Debris are generated who requests and receives Commercial or Multifamily Collection services for Municipal Solid Waste and/or Divertible Materials from one or more Franchisees. In the event a business, non- residential property, Multifamily dwelling or Commercial Premises shares Containers and/or Collection services, " Customer" refers only to the entity that arranges and pays for such services.

Dirty Materials Recovery Facility (" Dirty MRF") means a facility, or that certain portion of a facility, that processes Processable Municipal Solid Waste to separate Recyclable Materials, Green Waste, Wood Waste, Construction and Demolition Debris and other Divertible materials for sale to end users. Franchisees shall not utilize any Dirty MRF that has not been approved by City and that does not meet the standards and requirements of Public Resources Code Section 42649 and all subsequent amendments, rules, and regulations promulgated in furtherance thereof requiring a Dirty MRF to be a source - separated comparable MRF.

Disposal" means the final disposition of solid waste of Municipal Solid Waste at a permitted landfill or transformation at a permitted facility, as transformation is defined and limited by the Act other permitted solid waste disposal facility.

Diversion" or "Divert" means any combination of Recycling, sorting, Composting and other processing activities conducted at a Clean MRF, a Dirty MRF, a Compost Facility, an Anaerobic Digestion Facility, a Bioengineered Feedstock Facility, and/or a Construction and Demolition Debris Processing Facility in order to use or market the materials for re -use, remanufacture, reconstitution or otherwise return the materials to the economic marketplace and to prevent the materials from being Disposed in a Landfill.

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Diversion Plan" or " the Plan" means a plan prepared for a Customer by Franchisee pursuant to Exhibit E, Section A 2 of this Franchise Agreement that describes in detail the Diversion Program( s) recommended by Franchisee to be implemented at Customer' s premises. A Diversion Plan contains estimated quantities of Divertible Materials generated at the Customer' s premises, recommended types and sizes of outside Containers for storage of Divertible Materials, recommended frequency of Collection; modifications to sizes, types and Collection frequency for Containers for Municipal Solid Waste to adjust for the separate storage and Collection of Divertible Materials, and plans for the flow of materials through Customer' s premises, including the location and sizing of interior Containers required for separation and interim storage of Divertible Materials. Diversion Plans also contain projected costs and any projected cost savings to the Customer for implementing the Diversion Plan.

Diversion Program( s)," " Recycling Program( s)" and " Diversion Services" mean Recyclable Materials Collection, Green Waste Collection, Wood Waste Collection, Food Scraps Collection, Processable Municipal Solid Waste Collection, Construction and Demolition Debris Collection and subsequent processing of the Collected materials at a Clean MRF, a Dirty MRF, a Compost Facility, an Anaerobic Digestion Facility, a facility creating Engineered Feedstock for digestion at a wastewater treatment plant, a Construction and Demolition Debris Processing Facility and all other programs operated by Franchisees, the City, Residents, Customers or other Persons that have the effect of Diverting Municipal Solid Waste from Landfill Disposal. Diversion Programs includes, but is not limited to, all of the programs included in the City' s SRRE and all of the programs included in this Agreement.

Divertible Materials" or " Divertible" means Recyclable Materials, Food Scraps, Green Waste, Wood Waste, Construction and Demolition Debris, electronic waste, universal waste and all other materials that can be diverted from Landfill Disposal.

Divertible Materials includes, but is not limited to, all materials required to be diverted from Landfill Disposal by City, CalRecycle or any state or federal agency." Edible Food For Human Consumption" or " Edible Food" means food that has been prepared but not served, and includes, but is not limited to: any appetizer, soup, salad, entree, dessert, raw fruit and vegetable, that may or may not have been sliced, grated, cooked, baked or otherwise prepared for consumption but not served; any packaged sandwich, salad, fruit and fruit salad and any other non -served food that meets state and local requirements as being edible for human consumption.

Effective Date" means the date upon which this Agreement is effective as set forth in the first paragraph of this Agreement.

Environmental Laws" means any and all present and future federal, state or local laws ( whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of Governmental Authorities relating to the environment or any Hazardous Substance" or " Hazardous Substance Activity" as defined herein, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( 42 U. S. C. Sections 9601 et seq.) as amended from time to time and Non- exclusive Franchise Agreement Page 8
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the applicable provisions of the California Health and Safety Code and California Water Code.

Food Scraps" means material resulting from the production, processing, preparation or cooking of food for human consumption that is separated from Municipal Solid Waste. Food scraps include surplus or unsold edible food, raw food left over after food preparation, leftover cooked food, as well as spoiled food such as vegetables and culls, and plate scrapings. Food scraps includes food -soiled paper that is mixed in with the food scraps. " Food Scraps" are Collected and transported to Food Scrap Processing Facilities which include Compost Facilities, Anaerobic Digestion Facilities, and Wastewater Treatment Plants utilizing Engineered Feedstock.

Food Soiled Paper" means paper towels, tissue products, paper napkins, paper plates and cups, coffee filters, tea bags, waxed paper, butcher paper, paper take- out boxes and containers, greasy pizza boxes, paper bags, cardboard and wax -coated cardboard produce boxes that are Contaminated with Food Scraps. Food Soiled Paper does not include polystyrene, aluminum foil, foil -lined wrap or diapers.

Franchise" or " Franchise Agreement" means this Agreement between the City and a Franchisee, granted pursuant to Agreement Section 1(A), providing Franchisee the right, for a specified period of time and pursuant to Article XIII of the City Charter, the Code, and the terms and conditions of this Agreement, to provide for the Collection and Diversion of Commercial Solid Waste Handling Services to Commercial Premises and Multifamily Dwellings within all or any part of the City of Newport Beach and to use the public streets and public right-of-ways for such purpose. Throughout this Agreement, the terms " Agreement," " Franchise" or " Franchise Services" may be used interchangeably unless otherwise specified or the context requires otherwise.

Franchisee" means the individual or business entity identified as "Franchisee" on the signature page of this Agreement.

Franchise Fee" means the fee or assessment imposed by the City on a Franchisee, which among other things, is intended to offset the City's expenses related to the administration of the Franchise Agreement, the Integrated Waste Management Program, the maintenance and implementation of the City's Source Reduction and Recycling Element, compliance with the California Integrated Waste Management Act, to compensate the City for damages to its streets, sidewalks, curbs and gutters and other infrastructure resulting from the Franchisee' s exercise of its rights under the franchise, City's reporting requirements and other related expenses.

Generator" means a resident, an owner or responsible party for a Multifamily Dwelling, Commercial Premises, or business that Generates Municipal Solid Waste, Recyclable Materials, Green Waste, Food Scraps and/ or Construction and Demolition Debris as a result of its business, commercial facility or property activity. Generator may also include tenants, property managers for facilities with leased space, employees and contractors of Generator.

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Generate" means to bring into existence or create, or to use, maintain, or possess an item, material or product, the result of which such creation, bringing into existence, use, maintenance or possession is that the item, material or product first becomes, or is converted transformed, evolved or deemed as Municipal Solid Waste, Recyclable Materials, Food Scraps, Green Waste or Construction and Demolition Debris.

Green Waste" means any debris that is composed of organic material or plantlike matter, which is a result of seasonal variations, landscape or gardening activities. Green Waste includes, without limitation, grass clippings, leaves, shrubs, trees, branches, stumps, flowers, plant stalks and non -hazardous wood. Green Waste does not include Food Scraps.

Gross Receipts" means all money, whether paid by cash, check, debit or credit, or other consideration collected from Customers by Franchisee that relates in any way to Commercial Franchise Services provided by Franchisee to Customers, whether or not such services occur wholly or partially within the City, including, but not limited to, Collection, processing, removal, marketing and Diversion of Recyclable Materials, Green Waste, Food Scraps, Processable Municipal Solid Waste and Construction and Demolition Debris and Disposal of Non- Processable Municipal Solid Waste, Industrial Waste, trash, litter, as well as fuel surcharges. Gross receipts shall also include all money received by any Person other than the Franchisee, where the money was paid to the Person to avoid the Franchisee' s obligations under this chapter and/ or the Franchise.

Gross Receipts shall not include ( or if included there shall be deducted, but only to the extent they have been included) the following: ( 1) if any sales taxes are levied on the Franchisee' s Commercial Franchise Services in the City, the amount of State sales taxes collected in connection with Franchisee' s provision of such services in the City and remitted to the State pursuant to State law; (2) the amount of documented bad debt write- offs due to uncollectible accounts for Franchisee' s Commercial Franchise Services in the City, not to exceed three percent ( 3%) of Gross Receipts; and ( 3) revenues collected for Franchisee' s Commercial Franchise Services provided to the City through a written contract.

Hazardous Waste" or " Hazardous Substance" means any ( a) chemical, compound, material, mixture or substance that is now or hereinafter defined or listed in, or otherwise classified pursuant to any Environmental Law as a " hazardous substance," hazardous material," " hazardous waste," " extremely hazardous waste," " infectious waste," " toxic waste," " toxic pollutant," or any other formulation intended to define, list or classify substances by reason of deleterious properties or effect and ( b) petroleum, petroleum by-products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources.

Industrial Waste" means solid waste originating from mechanized manufacturing facilities, factories, refineries, construction and demolition projects, publicly operated treatment works, or solid waste placed in Commercial Solid Waste containers excluding hazardous waste.

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Landfill" means a fully permitted disposal site that accepts Municipal Solid Waste that is in compliance with all Federal, State and local laws, regulations and permits conditions at the time Municipal Solid Waste is delivered and unloaded at the disposal site.

Multifamily Dwelling" mean housing projects containing or consisting of five (5) or more units, whether apartment houses, condominiums, townhomes, or mixed use projects, mixedusecondominiumsand rentalhousing, which use centralizedCommercial Solid Waste Containers ( including Bins, Carts and/ or Compactors) for storage of Municipal Solid Waste, Recyclable Materials, Green Waste and/ or Food Scraps.

Multifamily Dwelling does not include single-family residences, duplexes, tri-plexes or four-plexes that receive individual Collection services for Municipal Solid Waste, Recyclable Materials, Green Waste and/ or Food Scraps stored in wheeled carts. For purposesof the implementationof the Diversionprograms, reportingrequirements, and the percentage Diversion requirements, " Commercial Tons" shall include only Tons Collected from Multifamily Dwellings in Carts, Bins, Compactors or Roll Off Boxes and shall not include any Tons Collected from Containers Collected from Commercial Premises. Tons Collected from Containers Collected from Commercial Premises shall be reported separately.

Municipal Solid Waste" means all Processable Municipal Solid Waste and all Non- Processable Municipal Solid Waste, putrescible and nonputrescible solid and semisolid wastes, Generated in or upon, related to the occupancy of, remaining in or emanating from residential, commercial, and/or industrial premises, including, but not limited to, garbage, trash, refuse, rubbish, ashes, IndustrialWaste, discarded home and industrial appliances, manure, vegetable or animal solid or semisolid wastes, and other solid and semisolid wastes. Municipal Solid Waste excludes Recyclable Materials, Green Waste, Food Scraps, Construction and Demolition Debris, liquid wastes, abandoned vehicles and hazardous, biohazardous and biomedical wastes.

Non- Processable Municipal Solid Waste" means putrescible and non- putrescible solid and semi -solid wastes Generated in or upon, related to the occupancy of, remaining or emanating from residential, Commercial, and/or industrial premises, that has been segregated or separated from Recyclable Materials, Food Scraps, Green Waste, wood and/or Construction and Demolition Debris such that the remaining constituents in the Non-Processable Municipal Solid Waste (such as broken glass, diapers, ashes, Industrial Waste, discarded Bulky Goods that cannot be re -used or dismantled for Recycling, manure, vegetable or animal solid or semi - solid wastes that remain after segregation of Food Scraps and Green Waste) cannot be diverted by reasonable economic or technologically available means. Non- Processable Municipal Solid Waste does not include Recyclable Materials, Green Waste, Food Scraps, wood, Construction and Demolition Debris, Bulky Goods or other materials that have been segregated for Diversion; liquid wastes; low level radioactive waste regulated under California Health and Safety Code Sections 20015, etseq.; abandoned vehicles and auto parts; hazardous, biohazardous and biomedical wastes.

Person" means an individual, firm, association, organization, partnership, corporation, businesstrust, joint venture, Limited Liability Company, the United States, Non- exclusive Franchise Agreement Page 11
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the State of California, the County, municipality, special purpose district or any other business entity whatsoever.

Processable Municipal Solid Waste" means putrescible and non-putrescible solid and semi -solid wastes Generated in or upon, related to the occupancy of, remaining or emanating from residential, commercial, and/or industrial premises that can be sorted at a Dirty MRF to separate any Divertible Materials contained therein for Recycling.

Processable Municipal Solid Waste may also contain non-divertible constituents including but not limited to, broken glass, diapers, ashes, Industrial Waste, discarded Bulky Goods that cannot be re -used or dismantled for Recycling, manure, vegetable or animal solid or semi - solid wastes that remain after segregation of Food Scraps and Green Waste, which cannot be separated or sorted out of the Processable Municipal Solid Waste by reasonable economic or technologically available means.

Processing Facility/ Facilities" means a facility or facilities where the following activities are conducted: sorting, cleaning, treating, Composting and reconstituting Collected materials and returning these materials to the economic mainstream in the form of raw materials for new, reused or reconstituted products which meet the quality standards of the market place (activities are herein collectively defined as "Processing").

Processing Facilities include Materials Recovery Facilities ( both Clean and Dirty MRF' s as defined herein), Composting Facilities, Anaerobic Digestion Facilities, Wastewater Treatment Plants, Construction and Demolition Debris sorting facilities, and concrete and asphalt grinding facilities. Processing Facilities do not include waste -to -energy, thermal destruction or any type of Transformation facilities.

Recycle/ Recycling" means the process of collecting, sorting, cleansing, treating, and reconstituting materials that would otherwise become Non-Processable Municipal Solid Waste, and returning them to the economic mainstream in the form of raw materials for new, reused, or reconstituted products which meet the quality standards used in the marketplace. Recycling does not include Transformation.

Recycling Facility" means a Recycling Materials Recovery Facility (either a Clean or Dirty MRF), a Construction and Demolition Debris sorting facility or a re -use facility that is fully permitted and operating in compliance with federal, state and local laws and regulations and includes Recycling Facilities that receive, process, and market Recyclable Materials that have been source separated by the Generator or segregated from Processable Municipal Solid Waste, such as Single - Material Recyclables and Single Stream Recyclable Materials. The Recycling Facility may be located at a landfill.

Recyclable Materials" means items in the solid waste stream which can be reused or processed into a form suitable for reuse consistent with the requirements of State law i. e., AB 939). Recyclable materials include, but are not limited to, aluminum and tin cans, glass bottles, plastic bottles, plastic containers, newspaper, paper, printed materials, paper containers, cardboard and textiles.

Recycling Requirements" means the obligations imposed by or upon the City pursuant to State, Federal and local law, ordinance, resolution, policy, plan or program relative to Diverting all, or a portion, of the Municipal Solid Waste generated within the Non- exclusive Franchise Agreement Page 12
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City including, without limitation, State mandates to Divert fifty percent ( 50%) of the Municipal Solid Waste Generated within the City, achievement of the per capita Diversion requirements in the Act, and the provision of City -approved Diversion services to all Customers. Recycling Requirements includes future changes to the Act that may require the City to Diverthigherpercentagesof MunicipalSolidWaste Generatedwithin the City and/or to provide additional and/or enhanced or expanded Diversion Programs.

Residue" means the Non- Processable Municipal Solid Waste destined for Disposal in a Landfill, which remains after processing at a Processing Facility has taken place. Residue does not include Anaerobic Digestate. The percent of Residue is calculated by dividing the weight of the Residue by the weight of the total materials delivered for processing at the facility. State law and regulations govern the allowable amount of Residue that can be Generated by a Processing Facility. Franchisees shall not utilize Processing Facilities that exceed State -required maximum Residue Generation rates for any materials Collected within the City.

Responsible Party" means the individual or entity responsible for the Generator' s management of solid waste and/ or Recycling at the Generator' s commercial premises, business, or non- residential property.

Roll Off Boxes" means large open top rectangular metal Containers used to store and transport Municipal Solid Waste, Recyclable Materials, Green Waste, Construction and Demolition Debris or other materials.

Single Material Recyclables" means those Recyclable Materials which satisfy each of the following requirements: ( 1) have been segregated from Processable Municipal Solid Waste for separate handling and Diversion by or for the Generator thereof; ( 2) have been further segregated or sorted so that various types of Recyclable Materials, such as glass, metals, paper, cardboard, plastics are not commingled; and (3) after such segregation, contain no more than five percent ( 5%) by weight ( measured by each load being transported, Collected and/ or Disposed) of any Residue or Contamination material which cannot be Recycled, Composted or similarly utilized, and which instead must be Disposed in a Landfill.

Single Stream Recyclable Materials" or " Single Stream Recyclables" means those Recyclable Materials collected as separated from Processable Municipal Solid Waste by the Generator or Customer and consisting of a mixture of metals, glass, plastics # 1- 7, and all paper from Residential Premises, Commercial Premises, Multifamily Dwellings and industrial premises. Single Stream Recyclable Materials are distinguished from Single -Material Recyclables, which consist of only a single type of material such as cardboard, separated from other Recyclable Materials.

Split Bins" means Bins that have a divider down the middle, dividing the Bin into two ( 2) separate compartments. Such Bins have separate locking lids for each side of the Bin that allows the Bin to be emptied one ( 1) side at a time. The lid on the side of the Bin that is for storage of Recyclable Materials is designed such that it allows for the placement of Recyclable Materials in the Bin without unlocking or opening the lid, and yet Non- exclusive Franchise Agreement Page 13
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does not allow Recyclable Materials to spill out when the lid is closed and locked for the emptying of the MSW stored on the opposite side of the Bin.

SRRE" means the Source Reduction and Recycling Element of the Integrated Waste Management document for the City prepared and updated pursuant to the California Public Resources Code.

Term" means the finite amount of time that commences on the Effective Date and terminates on the Termination Date.

Termination Date" means October 7, 2027.

State" means the State of California.

Transformation" means incineration, pyrolysis, distillation, or biological conversion otherthanComposting) to turn MunicipalSolidWaste and/or organicmaterialsinto a fuel used to produce energy ( example: waste -to -energy). Transformation does not include Composting, gasification, Biomass Conversion, or wet or dry Anaerobic Digestion.

Transformation Facility" means a facility using a Transformation process to turn Municipal Solid Waste and/ or organic materials into a fuel used to produce energy. A Franchisee may only utilize Transformation for the quantity of Municipal Solid Waste allowed by CalRecycle to be counted as Diversion pursuant to the Act, as this may be changed in the future by legislation or regulations. The Act currently provides that a jurisdiction can only use Transformation to divert up to ten percent ( 10%) of the Municipal Solid Waste generated in the jurisdiction. Therefore, materials collected by a Franchisee and processed at a Transformation Facility shall be limited to ten percent ( 10%) of the Non- Processable Municipal Solid Waste Collected by the Franchisee within City.

Ton" means a short ton of two -thousand ( 2,000) pounds avoirdupois.

Wood Waste" means all non -hazardous wood material that is not painted with lead -based or other paints containing materials identified as hazardous waste, or treated with creosote or other hazardous materials. Wood Waste includes, but is not limited to, tree branches and other wood trimmings, dimensional lumber and other pieces of wood generatedduring the manufactureor processingof wood products. For wood generated from construction and/ or demolition activities, see the definition of " Construction and Demolition Debris.

SECTION 4. FRANCHISE FEES
A. During the Term of this Franchise, Franchisee shall pay to City Franchise Fees for the privilege of providing Commercial Franchise Services in the City and for the use of public streets, right-of-ways and places for such purposes. The Franchise Fees that Franchisee shall pay to the City shall total sixteen percent ( 16%) of the gross receipts which are reasonably related to the value of Agreement for all Commercial Franchise Services provided by Franchisee in the City as follows:

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1. Ten and one- half percent ( 10. 5%) of the Gross Receipts for all Commercial Franchise Services provided by the Franchisee in the City (" Commercial Franchise Service Fee"), of which one half percent (. 5%) shall be attributable to the maintenance and implementation of the City's SRRE, and shall be separately accounted for, and used only for the costs stated in Public ResourcesCode Section41901 or any successor provision.

2. Five and one- half percent ( 5.5%) of the Gross Receipts for all Commercial Franchise Services provided by Franchisee in the City shall be paid into an Environmental Liability Fund, which shall be a separate fund established and maintained by City (" Environmental Liability Fund Fee"). Hereinafter, Environmental Liability Fund Fee and Commercial Franchise Fee shall be collectively referred to as "Fees." B. City and Franchisee acknowledge the potential environmental liability that may resultfrom CommercialFranchise Services under Federaland State environmental protection laws and the Public Resources Code. City intends to take reasonable actions to obtain protection and indemnification against future environmental liability for Commercial Solid Waste and Divertible Materials generated within the City and the activities of Franchisee under this Agreement for handling such Commercial Solid Waste and Divertible Materials. To provide protection and indemnification to City for Franchisee' s Commercial Franchise Services in the City, Franchisee agrees to collect from its customers an Environmental Liability Fund Fee for payment into the Environmental Liability Fund. The Environmental Liability Fund may be used by the City for any expense associatedwiththis Franchise, including, but notlimitedto, the purchase of environmental liability insurance and paying all costs, expenses, and penalties that arise from or in any way relate to liability incurred by the City as a result of any act, negligence, or omission by the City, Franchisee, Franchisee Customer, or any of their respective officers, directors, shareholder members, volunteers, partners, employees, agents, subcontractors, suppliers, representatives or affiliates. The Environmental Liability Fund may also be used by the City to pay for any Disposal, Diversion, or Recyclingactivity requiredof the City, Franchisee, or any Generatorunder State, Federal or local law. The Fund shall not be commingled with or included in the City's General Fund.

1. The Fees shall be paid concurrently.

2. Compliance with this Section shall not limit Franchisee' s indemnification as set forth in Agreement Section 10; however, the indemnification provisions of Agreement Section 10 shall be secondary to the Environmental Liability Fund established by this Section or any insurance purchased by the Environmental Liability Fund.

C. The Fees shall be paid on a calendar quarterly basis on forms prescribed by the Finance Director.

D. All payments shall be made in lawful money of the United States of America and shall be paid to City in person or by United States' mail, or overnight mail service, at the Cashier' s Office located at 100 Civic Center Drive, P. O. Box 1768, Newport Beach, Non- exclusive Franchise Agreement Page 15
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California, 92658, or to such other address as City may from time to time designate in writing to Franchisee. If requested by City, Franchisee shall make payments electronically ( at www.newportbeachca. gov) or by wire transfer ( at Franchisee' s cost).

Franchisee assumes all risk of loss and responsibility for late charges and delinquency rates if payments are not timely received by City regardless of the method of transmittal.

E. Franchisee hereby acknowledges that the late payment of Fees or other sums due hereunder will cause City to incur costs not contemplated by this Agreement, the exact amount of which is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Accordingly, any payment of any sum to be paid by Franchisee not paid within five ( 5) calendar days of its due date shall be subject to a ten percent ( 10%) late charge plus interest on the amount due at the rate of ten percent ( 10%) per annum from the date due and payable by the terms of this Agreement until the same shall be paid. City and Franchisee agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to City for its loss suffered by such late payment by Franchisee.

F. With the exception of October 30, 2020, Fees shall be due and payable on April 30, July 30, October 30 and January 30 of each calendar year of the Term. Any dates falling on a weekend or holiday may be paid the first business day following the weekend or holiday. Fees must be received by City, not merely postmarked, by or before the aforementioned dates.

G. In the event Franchisee believes that it has paid Fees in excess of the Fees due to City, Franchiseemaysubmit a requestfor refundto the FinanceDirectoron a form provided by the Finance Director. If proof of overpayment is satisfactory to the Finance Director, the Finance Director shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit against any other amounts payable to City unless specifically authorized by the Finance Director in writing.

H. Each Franchise Fee and Environmental Liability Fund Fee payment shall be accompanied by a written statement described in Code Section 12.63.090, or any successor section, on a form provided by the Finance Director. No statement filed under this Section shall be conclusive as to the matters set forth in such statement, nor shall the filing of such statement preclude the City from collecting by appropriate action the sum that is actually due and payable.

I. Franchisee may separately list the actual Franchise Fee rate and Environmental Liability Fund Fee rate as established by this Section, and any other fees required by this Agreement, on its invoices to its customers. In no case may the Franchise Fee rate or Environmental Liability Fund Fee rate listed by the Franchisee on the invoice exceed the actual Franchise Fee or Environmental Liability Fund Fee rates imposed by the City.

SECTION 5. PERFORMANCE BOND/ DEPOSIT
A. Prior to the placement of any Container for Commercial Franchise Services on public or private property, Franchisee shall, to ensure compliance with the duties and Non- exclusive Franchise Agreement Page 16
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obligations imposed by the provisions of the Code, State regulation, regulations adopted by the City Manager and this Agreement, either: ( 1) provide City with a cash deposit Deposit"); or (2) obtain, provide and maintain, at its own expense, a faithful performance bond (" Bond"). The amount of the Deposit and Bond shall be determined in the Public Works Director' s sole and absolute discretion.

B. If Franchisee decides to provide a Bond, the Bond shall be issued by an insurance organization or surety: ( 1) currently authorized by the Insurance Commissioner to transact business of insurance in the State of California; ( 2) listed as an acceptable surety in the latest revision of the Federal Register Circular 570; and ( 3) assigned a Policyholders' Rating A ( or higher) and Financial Size Category Class VII ( or larger) in accordance with the latest edition of Best's Key Rating Guide: Property -Casualty. The Bond shall be in the form attached hereto as Exhibit ' A," which is incorporated herein by this reference.

SECTION 6. DIVERSION AND DISPOSAL OF MUNICIPAL SOLID WASTE,

RECYCLABLE MATERIALS, FOOD SCRAP AND GREEN WASTE
A. Franchisee shall comply with all Diversion requirements imposed by law, ordinance, or regulation on City, Franchisee, and/or any Commercial Premises or Multifamily Dwelling. On a monthly basis, Franchisee shall Divert a minimum of fifty-five percent ( 55%) of all Processable Municipal Solid Waste, Recyclable Materials, Food Scraps and Green Waste Collected in the City by Franchisee. This Diversion requirement is separate from and in addition to any Diversion requirements set forth in Agreement Sections 7, 12, 13, 14 and 15. In the event new or additional Diversion requirements are imposed by law, ordinance or regulation on City, Franchisee, and/or any Commercial Premises or Multifamily Dwelling, the City shall have the right to require Franchisee to Divert additional Municipal Solid Waste, Recyclable Materials, Food Scraps, and/ or Green Waste by providing Franchisee with thirty ( 30) calendar days written notice of the new Diversion requirements. Upon request of the Public Works Director, Franchisee shall provide all documents and information requested by the Public Works Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to Recycling and Diversion of Municipal Solid Waste, Recyclable Materials, Food Scraps and/ or Green Waste.

B. Franchisee shall Dispose of all Non- Processable Municipal Solid Waste collected in the City, over which Franchisee has control, in accordance with the Franchise Hauler Acknowledgment, attached hereto as Exhibit " B" and incorporated herein by reference. Franchisee hereby accepts and agrees to abide by all terms of the Franchise Hauler Acknowledgment. If, during the Term of this Agreement, the City's Waste Disposal Agreement with Orange County expires, lapses, or is terminated, the Franchise Hauler Acknowledgement shall be null and void and Franchisee shall Dispose of Municipal Solid Waste Collected in the City only by taking it to a fully permitted Orange County certified/ licensed landfill or to a fully permitted licensed transfer station, which is lawfully authorized to accept that specific type of solid waste material and has been approved by the City.

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C. Franchisee shall not Dispose of Municipal Solid Waste, Recyclable Materials, Food Scraps, or Green Waste by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in this Agreement shall be deemed or construedas authorizingFranchiseeto operatea Landfill, RecyclingFacility, or other solid waste disposal facility in the City.

D. If Franchisee violates the terms in Agreement Section 6( A) and/ or Section 6(13) above, Franchisee agrees that the City has the future right to direct that all Municipal Solid Waste be delivered to a fully permitted Disposal facility designated by City and that Recyclable Materials, Food Scraps, Green Waste and/ or Wood Waste be delivered to a fully permitted Processing Facility designated by City. This exercise of " flow control" by the City shall be made upon at least thirty ( 30) calendar days prior written notice to Franchisee, and written notice shall include the violation( s) prompting the City's action regarding " flow control." Failure to comply with the Recycling, Diversion, and/or Disposal requirements set forth in this Section shall be a material breach of this Agreement.

E. Franchisee shall include as a condition to its contractual agreement with its Customers a provision prohibiting disposal of Hazardous Waste in any Container.

F. Franchisee shall implement a load check program that includes, at a minimum, a visual check of all Containers to be emptied to protect against inclusion of Hazardous Waste and shall prepare a written record of all Hazardous Waste discovered duringthe process. The recordsshallcomplywith all Stateand FederalHazardousWaste Regulations and shall be maintained for the length of the Term of the Franchise and for a minimum period of three ( 3) years, or for any longer period required by law, after the Extended Termination Date. The records shall be made available to the City in Franchisee' s monthly reports submitted pursuant to Agreement Section 16.

G. This Agreement does not purport to grant Franchisee or City ownership over materials that Franchisee' s Customers discard for pickup by Franchisee or that Franchisee handles under this Agreement. The right to possession or ownership of those materials shall be determined in accordance with law and any agreement between Franchisee and its Customers, and not as a result of this Agreement. Parties acknowledgethat City has no ownership rights in Divertible Materials or revenue from sale thereof, except as provided in this Agreement.

H. City makes no representations or warranties with respect to characterization of Municipal Solid Waste, Recyclable Materials, Food Scraps, or Green Waste within City. City expressly disclaims any representations and warranties, either express or implied, as to the merchantability or fitness of Municipal Solid Waste, Recyclable Materials, Food Scraps, or Green Waste for any particular purpose.

SECTION 7. DIVERSION OF CONSTRUCTION AND DEMOLITION DEBRIS A. On a monthly basis, Franchisee shall Divert a minimum of sixty-five percent 65%) of all Construction and Demolition Debris collected in the City by Franchisee. This Diversion requirement shall be in addition to and separate from any Diversion Non- exclusive Franchise Agreement Page 18
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requirements set forth in Agreement Section 6. Franchisee shall also comply with all requirements of Section 15. If new or additional Diversion requirements are imposed by law, ordinance or regulation on City, Franchisee, and/or any Commercial Premises or MultifamilyDwelling, the Cityshall havethe rightto requireFranchiseeto Divertadditional Construction and Demolition Debris by providing Franchisee with ten ( 10) calendar days written notice of the new Diversion requirements. Upon request of the Public Works Director, Franchisee shall provide all documents and information requested by the Public Works Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to Recycling and Diversion of Construction and Demolition Debris.

B. Franchisee shall Dispose of, or oversee Disposal of, any Construction and Demolition Debris collected in the City by Franchisee, and not diverted pursuant to Agreement Section 7( A), in accordance with the Franchise Hauler Acknowledgment, attached hereto as Exhibit " B." Franchisee hereby accepts and agrees to abide by all terms of the Franchise Hauler Acknowledgment. If, during the Term of this Agreement, the City's Waste Disposal Agreement with Orange County expires, lapses or is terminated, the Franchise Hauler Acknowledgement shall be null and void and Franchisee shall Dispose of non - Diverted Construction and Demolition Debris collected by Franchisee in the City only by taking such debris to an Orange County certified/ licensed landfill, State certified/ licensed transfer station, State certified/ licensed recycling facility or State certified/licensed materials recovery facility which is lawfully authorized to accept that specific type of solid waste material. Franchisee shall not dispose of Construction and Demolition Debris by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system.

C. If Franchisee violates the terms in Agreement Section 7( A) and/ or Section 7(B) above, Franchisee agrees that the City has the future right to direct that Construction and Demolition Debris be delivered to a permitted processing and/or disposal facility designatedby City. Thisexerciseof "flow control" bythe Cityshall be madeuponat least thirty (30) calendar days prior written notice to Franchisee, and written notice shall include the violation( s) prompting the City's action regarding "flow control." Failure to comply with the Recycling, Diversion, and/or Disposalrequirementsset forth in this Section shall be a material breach of this Agreement.

D. Franchisee shall include as a condition to its contractual agreement with its Customers a provision prohibiting disposal of Hazardous Waste in any Container.

E. Franchisee shall implement, or require a third party to implement, a load check program that includes, at a minimum, a visual check of all Containers to be emptied to protect againstinclusionof HazardousWaste and shall prepare a written recordof all Hazardous Waste discovered during the process. The records shall comply with all local, State and Federal Hazardous Waste regulations, and shall be maintained for the length of the Term of the Franchise and for a minimum period of three ( 3) years, or for any longer period requiredby law, after the ExtendedTerminationDate. The recordsshall be made available to the City upon request.

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F. This Agreement does not purport to grant Franchisee or City ownership over materials that Franchisee' s Customers discard for pickup by Franchisee or that Franchisee handles under this Agreement. The right to possession or ownership of those materials shall be determined in accordance with law and any agreement between Franchisee and its customers, and not as a result of this Agreement. Parties acknowledgethat City has no ownershiprights in RecyclableMaterialsor revenuefrom sale thereof, except as provided in this Agreement.

G. City makes no representations or warranties with respect to characterization of Construction and Demolition Debris within City. City expressly disclaims any representations and warranties, either express or implied, as to the merchantability or fitness of Construction and Demolition Debris for any particular purpose.

SECTION 8. FRANCHISEE' S APPLICATION; RECORDS; AUDITS
A. Application. Franchisee has submitted an application to City in substantially the same form as the template attached hereto as Exhibit " C" and incorporated herein by reference as a condition of entering into this Agreement. Franchisee hereby represents and warrants that all information contained in the application submitted to City, and any information submitted by Franchisee to City supplementary thereto, is true and correct and does not contain any untrue statement of a material fact nor omit a material fact that makes a statement contained therein misleading.

B. Records. Franchisee shall maintain all records relating to Franchisee' s Commercial Franchise Services provided hereunder including, but not limited to, Customer lists, billing records, accounts payable records, maps, service requests, cash receipts records, AB 939/ 341/ 1826 compliance records, tonnage reports, weight tickets and invoices from all Landfills, Processing Facilities, and Recycling Facilities utilized for Commercial Solid Waste collected within City, and all other documents and materials which reasonably relate to Franchisee's compliance with and performance of the provisions of this Agreement (" Records"), for the full Term of this Agreement and an additionalperiodthereafterof not lessthan three (3) years, or any longerperiod required by law. Such Records shall be made available to City at Franchisee's regular place of business, but in no event outside the County of Orange. All Records shall be clearly identifiable, and Franchisee shall maintain record security sufficient to preserve records from destruction or damage from foreseeable events. Data maintained in an electronic medium shall be protected, and backed up, with a copy stored at a separate site from the original data.

C. CERCLA Defense Records. City's ability to defend against CERCLA and related litigation is a matter of great importance. Franchisee shall maintain and preserve records establishingwhere Solid Waste Collected in the City was landfilledfor the full Term of this Agreement and an additional period thereafter of not less than five (5) years, or any longer period required by law. At any time, including after the expiration of the Term, Franchisee shall provide copies of such records to City within three ( 3) business days of City' s request.

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D. Inspection; Audit. On an annual or as -needed basis, City shall have the right, upon five ( 5) business days advance notice, to inspect Franchisee' s Records and/ or conduct, or to contract with an independent auditing firm to perform, an audit, at City' s expense, of Franchisee' s Records (" City Audit") to ensure compliance with the provisions of this Agreement. The City Audit shall include, without limitation, review and/or copying of Franchisee's cash receipts, books of account, Municipal Solid Waste and Divertible Materials tonnage reports, Collection, Disposal and Diversion records, and other related records, as well as those of each of its parent, subsidiary and/ or affiliated companies, as appropriate. As part of the City Audit, Franchisee' s Customer accounts and related records may be subject to review. While Franchisee will not be required to submit for copying detailed account records, such as Customer names, Franchisee shall make such records and information available for review in connection with the City Audit. The purpose of the City Audit shall be for: ( a) verification of the Fees paid by Franchisee under this Agreement, and the accuracy thereof; ( b) verification of the amounts of Municipal Solid Waste and Divertible Materials reported as Collected, processed, Diverted and Disposed by Franchisee pursuant to this Agreement; ( c) verification of Recycling/ Diversion program implementation efforts and actions taken by Franchisee pursuant to this Agreement; and ( d) verification of such other information as is reasonably deemed appropriate by the Public Works Director to evaluate Franchisee' s performance hereunder.

E. Reimbursement. Franchisee shall reimburse City for all of City's costs in performance of an audit if, as a result of the audit, it is determined:

1. There was any intentional misrepresentation by Franchisee with respect to the amount of Fees due to the City;

2. There is a One Thousand and 00/ 100 Dollars ($ 1,000. 00) or greater discrepancy in the amount of Fees due to the City.

3. There was any intentional misrepresentation by Franchisee with respect to Franchisee' s Commercial Franchise Services and/ or Franchisee' s handling and transportation of Municipal Solid Waste and/ or Divertible Materials or with regard to any information provided about Diversion; or

4. There is a discrepancy ( whether intentional or not) in the number of Tons of Municipal Solid Waste, Recyclable Materials, Green Waste, Foods Scraps and/ or Construction and Demolition Debris Collected, Recycled, processed and/ or Disposed that equals or exceeds two percent ( 2%).

Such reimbursement shall be paid by Franchisee within ten ( 10) calendar days of the date City notifies Franchisee in writing that Franchisee is liable to reimburse the City in conformance with this subsection and the amount of City' s audit costs.

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SECTION 9. INSURANCE REQUIREMENTS
Without limiting Franchisee' s indemnification of City, and prior to commencement of the Effective Date of this Agreement, Franchisee shall obtain, provide copies to City and maintain at its own expense during the Term of this Agreement policies of insurance of the type and amounts described in the Insurance Requirements attached hereto as Exhibit " D" and incorporated herein by reference.

SECTION 10. RESPONSIBILITY FOR DAMAGES AND INJURY/ INDEMNIFICATION A. Franchisee Responsibility. Franchisee shall be solely responsible for any damages caused as a result of Franchisee' s acts, negligence, or omissions including, but not limited to, injuries to or death of any person or damage to public and/or private property and damages to public improvements arising from or as a result of Franchisee' s Commercial Franchise Services.

B. General Indemnification. Franchisee shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns collectively, " Indemnified Parties") from and against any costs, expenses, damages, and losses, including actual attorneys' fees (" Losses") of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: ( i) any act, negligence, or omission of Franchisee or its respective officers, directors, shareholder members, partners, employees, agents, Franchisee' s subcontractors, suppliers, representatives and affiliates (" Franchisee Representatives"); ( ii) Franchisee' s or Franchisee Representative' s activities; ( iii) any accident or casualty within or arising out of the performance of Franchisee' s Commercial Franchise Services under this Franchise; iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of Commercial Recyclable Materials, Food Scraps, Green Waste, Wood Waste, Construction and Demolition Debris and/ or Municipal Solid Waste services performed pursuant to the Franchise; ( v) the negligence or willful misconduct of Franchisee or any of Franchisee Representatives in the performance of Franchisee' s Commercial Franchise Services under the Franchise; and ( vi) any breach of the Franchise.

Franchisee shall not be required to indemnify, hold harmless and defend the Indemnified Parties from the sole negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Franchisee.

C. Hazardous Substances Indemnification. Franchisee shall indemnify the Indemnified Parties from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, Non- exclusive Franchise Agreement Page 22
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liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid, incurred or suffered by, or asserted against, the Indemnified Parties or Franchisee arising directly or indirectly from or caused by any of the following:
i) the violation of any environmental laws or the failure to clean up and mitigate the consequences of the spill or release of any Hazardous Substance; and ( ii) Franchisee' s activities under this Agreement concerning any Hazardous Substance at any place where Franchisee stores or disposes of solid or Hazardous Waste pursuant to this Agreement, or preceding Agreements between City and Franchisee. The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ( 42 U. S. C. Section 9607( e)) and any amendments thereto, and California Health and Safety Code Section 25364, or any successor statute, to insure, protect, hold harmless, and indemnify City from liability.

D. AB 939 Indemnification. Franchisee agrees to meet all requirements of City's SRRE as to the portion of the Commercial Solid Waste stream Collected and/or handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold the Indemnified Parties harmless against all fines or penalties imposed by CalRecycle, or other entity, arising from the failure of Franchisee to meet Act Diversion requirements with respect to the portion of the Commercial Solid Waste stream collected by Franchisee.

E. AB 341 Indemnification. Franchisee agrees to meet all requirements of AB 341, specifically Public Resources Code Section 42649, or any successor statute, as to the portion of the Municipal Solid Waste and Recyclable Materials stream Collected and/or handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold the Indemnified Parties harmless against all fines or penalties imposed by CalRecycle, or other entity, arising from the failure of Franchisee to meet AB 341 diversion and recycling requirements with respect to the Municipal Solid Waste and Divertible Materials Collected and/ or handled by Franchisee.

F. AB 1826 Indemnification. Franchisee agrees to meet all requirements of AB 1826, specifically Public Resources Code Section 42649. 82, or any successor statute, as to the portion of the Food Scraps, Green Waste and Wood Waste streams Collected and/or handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold the Indemnified Parties harmless against all fines or penalties imposed by CalRecycle, or other entity, arising from the failure of Franchisee to meet AB 1826 recycling requirements with respect to the Food Scraps and Green Waste collected and/ or handled by Franchisee.

G. Notice. City agrees to give notice to Franchisee when the City receives a claim for damages or other liability for which Franchisee has provided indemnification under this Section.

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SECTION 11. COMMERCIAL SOLID WASTE AND DIVERTIBLE MATERIALS

COLLECTION SERVICES
A. Authorized Collection Services. Franchisee may only provide those Commercial Franchise Services designated in Franchisee' s application, or any amended application, and for which Franchisee has demonstrated compliance with Code Section

12.63. 050, or any successor section.

B. Frequency of Collection. Franchisee shall collect all Municipal Solid Waste and Divertible Materials from Commercial Premises and Multifamily Dwellings on a schedule to be agreed upon between Franchisee and its Customers, subject to the restrictions set forth in Agreement Section 11( C); provided, however, that such schedule complies with Code Subsections 6. 04. 110 and 6. 04. 120 and does not permit the accumulation of Commercial Solid Waste or Divertible Materials in quantities that are unreasonable or detrimental to the public health or safety. Requests for Collection from Customer Premises with overflowing Containers, or from Customer Premises where there have been missed pickups, shall be serviced within twenty-four ( 24) hours of any such request by the Customer or City. Should City receive a Customer complaint related to or arising from Franchisee's failure to collect Commercial Solid Waste and Divertible Materials as provided herein, Franchisee' s Collection schedule shall be submitted to the City for review.

C. Hours and Days of Collections.

1. Franchisee shall not collect Commercial Solid Waste or Divertible Materials in any area of the City after 6:30 p.m. and prior to 5:00 a.m.

2. Franchisee shall not Collect Commercial Solid Waste or Divertible Materials from any Commercial Premises or Multifamily Dwelling located within five hundred ( 500) feet of an occupied residential premise, motel or hotel, nor shall any of Franchisee' s Collection vehicles be operated in any residential areas of the City except between the hours of 7:00 a. m. and 6: 30 p.m., Monday through Friday, nor on any Saturday or Sunday, except between the hours of 8:00 a.m. and 6:00 p.m.

3. Franchisee shall neither operate its Collection vehicles nor Collect Commercial Solid Waste or Divertible Materials from any Commercial Premises, governmentalfacility, or MultifamilyDwelling located within five hundred (500) feet of a school, or other educational facility between the hours of 7:30 a.m. and 9:00 a.m. or 1:00 p. m. and 3:00 p.m., Monday through Friday. The limitations in Agreement Section 11( C)( 3) notwithstanding, Franchisee' s operation of Collection vehicles on any non- residential arterial roadway within the City are subject to Section 6.04.130(A) but shall not be prohibited or limited under this Agreement.

4. Commercial Solid Waste and Divertible Materials collection on Sundays shall be limited to Food Scraps and Municipal Solid Waste from Commercial Premises, which require Collection every day due to public health and safety concerns.

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5. At Franchisee' s request, the City shall provide maps illustrating the geographiclimitationsplacedon Franchisee's Collectionservicespursuantto Agreement Section 11( C)( 3) (" Maps"). City expresslydisclaimsany liabilityrelatedto or arisingfrom the accuracy of any Maps provided by City. City may update the Maps as needed, and Franchisee' s failure to request or secure the Maps, or any updated Maps, shall not relieve Franchisee of any obligations under this Agreement.

D. Containers. Franchisee shall provide the appropriate sized Containers to each Customer for storage of the Commercial Solid Waste and Divertible Materials Collected by Franchisee. Containers provided by Franchisee must be identified with Franchisee' s name and be in the color identified by Franchisee in Franchisee' s application.

SECTION 12. AB 341 RECYCLING PROGRAM FOR COMMERCIAL PREMISES AND

MULTIFAMILY DWELLINGS
A. Diversion Program. The Act requires all AB 341 Generators to arrange for Recyclable Materials Collection services by July 1, 2012. The Act requires all cities to providea commercialRecyclableMaterialsCollectionProgramfor AB 341 Generatorson or before July 1, 2012. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11( A), for all AB 341 Generators that contract with or pay Franchisee to haul Municipal Solid Waste and/or Divertible Materials, Franchisee shall implement a Recyclable Materials Collection Program using one or more of the following:

Provide Single Stream Recyclable Materials and ( if applicable) Single Material Collection service on a weekly or more frequent basis.

2. Provide Collection of Recyclable Materials commingled with Municipal Solid Waste and process the Collected material at a City -approved Dirty MRF that yields Diversion results comparable to source separation. No Dirty MRF may be used for separation of AB 341 materials unless the Dirty MRF has been approved by City as meeting the standards and requirements of Public Resources Code Section 42649 and all rules, amendments and regulations promulgated in furtherance thereof.

3. If Franchisee observes that the AB 341 Generator has one ( 1) or more internal Programs that Divert Recyclable Materials, is self -hauling or backhauling Recyclable Materials, donating or selling Recyclable Materials to a third party, or is using a third party or other Franchisee to Collect Recyclable Materials, Franchisee shall report this to City and City, in its sole discretion, shall make a final determination as to the adequacy of the internal and/or third party Recyclable Materials Diversion Program( s). If the City finds the internal and/or third party Program( s) inadequate, Franchisee shall proceed to implement a Recyclable Materials Diversion Program to Divert all the remaining AB Non- exclusive Franchise Agreement Page 25
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341 Recyclable Materials generated by the AB 341 Generator as described in Exhibit E, which is incorporated herein by reference.

B. Act Compliance. The Parties agree that provision of an AB 341 Diversion Program, as set forth in this Section 12 and in Exhibit " E," is of paramount importance for the City to comply with the Act. The Parties further agree that providing high quality Diversion Services, public education and technical assistance to AB 341 Generators to obtain their full participation in AB 341 Diversion Program is essential for Franchisee to implement an effective Diversion Program for each and every AB 341 Generator it serves.

The Parties acknowledge that achievement of this requirement is integral to the City' s compliance with the Act and that failure to implement said AB 341 Diversion Programs may cause City to be non -compliant with the Act and be grounds for termination of this Agreement.

C. Program Implementation. Within ninety ( 90) calendar days of either: ( 1) the Effective Date of this Agreement; or ( 2) the date an AB 341 Generator initiates service with Franchisee to collect or transport Municipal Solid Waste and/ or Divertible Materials, whichever is later, Franchisee shall implement a Recyclable Materials Diversion Program for said AB 341 Generator. For purposes of this Section 12, " implement" as provided herein shall mean Franchisee' s completion of all of the steps and requirements in Exhibit E.

SECTION 13. AB 1826 FOOD SCRAP DIVERSION PROGRAM FOR COMMERCIAL

PREMISES
A. Food Scrap Diversion Program. The Act requires AB 1826 Generators to implement Diversion Programs as follows. On or after January 1, 2017, all owners and responsible parties of Commercial Premises generating four (4) or more cubic yards of Food Scraps and/or Green Waste per week must arrange for Diversion Programs for those materials. On or after January 1, 2019, all owners and responsible parties of Commercial Premises generating four (4) or more cubic yards of Commercial Solid Waste per week must arrange for Diversion Programs for Food Scraps and Green Waste. The Act requires cities to provide a commercial Food Scrap Diversion Program for AB 1826 Food Scrap Generators on or before January 1, 2016. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11(A), for all AB 1826 Food Scrap Generators that contract with or pay Franchisee to haul Municipal Solid Waste and/ or Divertible Materials Franchisee shall implement a Food Scrap Diversion Program. The City will maintain a listing of all AB 1826 Food Scrap Generators. City expressly disclaims any liability related to or arising from the accuracy of any lists provided by City. Franchisee' s failure to request or secure the list on an annual basis shall not relieve Franchisee of any obligations under this Section. Franchisee shall implement a Food Scrap Diversion Program using one or more of the following:

Provide source separated Food Scrap Collection service on a weekly or more frequent basis.

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or backhauling Food Scraps, is donating or selling Food Scraps, is donating edible food for human consumption, and/ or is using a third party or other Franchisee to Collect Food Scraps, Franchisee shall report this to City and City, in its sole discretion, shall make a final determination as to the adequacy of the internal and/or third party Food Scrap Diversion Program( s). If the City finds the internal and/or third party program( s) are inadequate, Franchisee shall proceed to implement a Diversion Program to Divert all the remaining AB 1826 Food Scraps generated by the AB 1826 Generator.

B. Act Compliance. The parties agree that provision of a Food Scrap Diversion Program as described in this Section 13 and in Exhibit "E" is of paramount importance for the City to comply with the Act. The parties further agree that providing high quality Diversion Services, public education, and technical assistance to AB 1826 Food Scrap Generators to obtain their full participation in AB 1826 Diversion Programs is essential for Franchisee to implement an effective Food Scrap Diversion Program for each and every AB 1826 Food Scrap Generator it serves. The parties acknowledge that achievement of this requirement is integral to the City's compliance with the Act and that failure to implement said Diversion Program may cause City to be non -compliant with the Act and be grounds for termination of this Agreement.

C. Program Implementation. Within ninety (90) calendar days of either: ( 1) the Effective Date of this Agreement; or ( 2) the date an AB 1826 Food Scrap Generator initiates service with Franchisee to Collect and/ or transport Municipal Solid Waste and/ or Divertible Materials , whichever is later, Franchisee shall implement a Food Scrap Diversion Program for said AB 1826 Food Scrap Generator. For purposes of this Section, Franchisee shall be found to have "implemented" a Food Scrap Diversion Program for an AB 1826 Food Scrap Generator only if Franchisee completes all of the steps and requirements in Exhibit E.

SECTION 14. AB 1826 COMMERCIAL AND MULTIFAMILY GREEN WASTE AND WOOD WASTE COLLECTION PROGRAM.

A. Act Requirements. The Act requires all AB 1826 Generators of Green Waste and/ or Wood Waste to implement Diversion Programs as follows. All Commercial Premises and all Multifamily Dwellings generating four ( 4) or more cubic yards of Food Scraps and/ or Green Waste and Wood Waste must arrange for Diversion Programs for Green Waste and Wood Waste on or before January 1, 2017. On or after January 1, 2019, all owners and responsible parties of Commercial Premises and Multifamily Dwellings generating four (4) or more cubic yards of Commercial Solid Waste per week are required to arrange for Diversion Programs for Green Waste and Wood Waste. The Act requires cities to provide Commercial and Multifamily Green Waste and Wood Waste Diversion Programs for AB 1826 Green Waste and Wood Waste Generators on or before January 1, 2016. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11( A), for all AB 1826 Green Waste and Wood Waste Generators that contract with or pay Franchisee to haul Municipal Solid Waste and/ or Divertible Materials, Franchisee shall implement a Green Waste and Wood Waste Diversion Program. ( For wood generated by construction and demolition projects, Non- exclusive Franchise Agreement Page 27
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the requirements of Sections 7 and 15 shall apply.) The City will maintain a listing of all AB 1826 Green Waste and Wood Waste Generators. City expressly disclaims any liability related to or arising from the accuracy of any lists provided by City. Franchisee' s failure to request or secure the list on an annual basis shall not relieve Franchisee of any obligations under this Section. Franchisee shall implement a Green Waste and Wood Waste Diversion Program using one or more of the following:

Provide source separated Green Waste and Wood Waste Collection service on a weekly or more frequent basis.

Provide Collection of Green Waste and Wood Waste co - mingled with Municipal Solid Waste and process the Collected material at a City - approved Dirty MRF that yields Diversion results comparable to source separation. No Dirty MRF may be used for separation of AB 1826 Green Waste or Wood Waste materials unless the Dirty MRF has been approved by City as meeting the standards and
requirements of Public Resources Code Section 42649 and all rules, amendments and regulations promulgated in furtherance thereof.

2. If Franchisee observes that the AB 1826 Green Waste and Wood Waste Generator has one ( 1) or more internal Green Waste and/ or Wood Waste Diversion Program( s), is self -hauling or backhauling Green Waste and/ or Wood Waste, is donating or selling Green Waste and/ or Wood Waste, or is using a third party or other Franchisee to Collect Green Waste and/ or Wood Waste, Franchisee shall report this to City and City, in its sole discretion, shall make a final determination as to the adequacy of the internal and/or third party Green Waste and/or Wood Waste Diversion Program(s). If the City finds the internal and/or third party program(s) are inadequate, Franchisee shall proceed to implement a Diversion Program to Divert all the remaining Green Waste and Wood Waste generated by the Customer.

3. If the AB 1826 Green Waste and Wood Waste Generator is using a landscaping company to haul away Green Waste and Wood Waste, Franchisee shall report this to the City and City, in its sole discretion, shall make a final determination as to the adequacy of the landscaper program to Divert all the Green Waste and Wood Waste. If the City finds the landscaper program to be inadequate and/or lacking the proper documentation of the end use for the Collected Green Waste and Wood Waste, Franchisee shall proceed to implement a Diversion Program to Divert all the Green Waste and Wood Waste generated by the AB 1826 Generator.

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landfill as an end use. This prohibition includes Green Waste and Wood Waste processed at a permitted Processing Facility as well as the residue from such Facility.

B. Act Compliance. The parties agree that provision of a Green Waste and Wood Waste Diversion Program as described in this Section 14 and in Exhibit " E" is of paramount importance for the City to comply with the Act. The parties further agree that providing high quality Diversion Services, public education, and technical assistance to AB 1826 Green Waste and Wood Waste Generators to obtain their full participation in AB 1826 Diversion Programs is essential for Franchisee to implement an effective Green Waste and Wood Waste Diversion Program for each and every AB 1826 Green Waste and Wood Waste Generator it serves. The parties acknowledge that achievement of this requirement is integral to the City's compliance with the Act and that failure to implement said Diversion Programs may cause City to be non -compliant with the Act and be grounds for termination of this Agreement.

C. Program Implementation. Within ninety (90) calendar days of either: ( 1) the Effective Date of this Agreement; or ( 2) the date an AB 1826 Green Waste and Wood Waste Generator initiates service with Franchisee to Collect and/ or transport Municipal Solid Waste and/ or Divertible Materials, whichever is later, Franchisee shall implement a Green Waste and Wood Waste Diversion Program for said AB 1826 Green Waste and Wood Waste Generator. For purposes of this Section, Franchisee shall be found to have implemented" a Green Waste and Wood Waste Diversion Program for an AB 1826 Green Waste and Wood Waste Generator only if Franchisee completes all of the steps and requirements in Exhibit E.

SECTION 15. CONSTRUCTION AND DEMOLITION DEBRIS RECYCLING PROGRAM A. Act Requirements. The California Green Building Standards Code codified in the California Code of Regulations Title 24, Part 11, (" CalGreen") and adopted by reference in Code Section 15.11.010, requires mandatory diversion of Construction and Demolition Debris. Contractor shall comply with all requirements of CalGreen, as it may be amended from time to time. In the event CalGreen and the City' s Construction and Demolition Debris diversion requirements differ, Franchisee shall comply with the highest Construction and Demolition Debris Diversion percentage. Further, City reserves the right to amend and/ or expand its own Construction and Demolition Debris Recycling ordinance at any time during the Term. Contractor shall provide all services necessary to (a) inform Customers of, ( b) support Customer compliance with, and ( c) support City' s enforcement of, the Construction and Demolition Debris Recycling requirements pursuant to CalGreen and the Code.

B. Construction and Demolition Debris Diversion Program. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11( A), for all Customers that contract with or pay Franchisee to haul Construction and Demolition Debris, Franchisee shall implement a Diversion Program as described and set forth in Exhibit " F" which is incorporated herein by reference.

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SECTION 16. REPORTING REQUIREMENTS.

A. Monthly Reports. Franchisee shall submit monthly reports to the Public Works Director identifying, at a minimum, the following information:

1. The address of each facility serviced and the precise services provided to each address including, but not limited to, Commercial Franchise Services broken down by type ( i.e., Recyclable Materials, Food Scraps, Green Waste, Wood Waste, Construction and Demolition Debris, and/ or Municipal Solid Waste) presented in an Excel format acceptable to the City;

2. The frequency of Commercial Franchise Services provided to each address;

3. The number of containers by type and size at each address and the frequency of collection;

4. The actual tonnage, by material category, collected per month in tons.;

5. The location of the Landfill and/or Processing Facility to which the Municipal Solid Waste, Recyclable Materials, Green Waste, Wood Waste and/ or Food Scraps were taken during the previous month and the Diversion rate achieved if the facility accepts mixed waste mate rials/ Processable Municipal Solid Waste;

6. AB 341 and AB 1826 compliance information by Generators, including the total number of AB 341 and AB 1826 accounts serviced by the Franchisee, the total number of accounts that have a Recycling Program, Food Scrap Diversion Program, and/ or Green Waste/ Wood Waste Diversion Program provided by the Franchisee, the number of Customers with Franchisee - documented internal Diversion programs that comply with AB 1826 and AB 341, the number of Customers that comply with AB 341 or AB 1826 via a Clean or Dirty MRF, the number of Customers that do not have an AB 341 or AB 1826-compliant Diversion program, and a description of outreach efforts for non - compliant Generators;

7. The " Exhibit E Tracking Document" described in subparts D, E and F of Exhibit E.

8. Such other tonnage or other information as requested by the Public Works Director including weight tickets and Diversion records.

B. Form of Report. Monthly reports shall be included in the City provided electronic template. No other templates or formats will be accepted. Use of any alternate format or template shall result in the monthly report being considered incomplete and inaccurate and the Franchisee shall be subject to assessment of liquidated damages pursuant to Section 24( B) of the Franchise.

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C. Report Due Date. Each monthly report shall be submitted on or before the 25th day of the month following the end of the month.

D. Submission. Franchisee shall submit each monthly report to:

Public Works Director
City of Newport Beach
P. O. Box 1768
100 Civic Center Dr.

Newport Beach, CA 92658
E. No Waiver. Franchisee shall file the monthly report required under Agreement Section 16(A) regardless of whether Franchisee has provided Commercial Franchise Services in the City during the reported month.

F. Compliance. Franchisee shall comply with all Recycling and Diversion requirements imposed by law, ordinance, or regulation on the City. At the end of each calendar month, reports will be evaluated for compliance with City Recycling and Diversion requirements. Failure to comply with City Recycling and Diversion requirements shall be a material breach of this Agreement.

SECTION 17. HAULER REPRESENTATIVE
Franchisee shall designate, at a minimum, one ( 1) individual employed by Franchisee to assist City in implementing the Agreement' s Recycling and Diversion programs, as applicable, and to manage all reporting requirements set forth herein Hauler Representative"). Franchisee shall provide City with the Hauler Representative' s contact information, and the Hauler Representative shall be the primary contact for the City. The Hauler Representative shall respond to any City questions or concerns relating to or arising from Franchisee' s performance under this Agreement within five (5) business days of City submitting such question or concern.

SECTION 18. VEHICLES AND EQUIPMENT
A. Containers. Any and all Containers provided to Customers for storage, Collection or transportation of Municipal Solid Waste, Recyclable Materials, Food Scraps, and/ or Green Waste shall meet the requirements designated by the Public Works Director as well as State of California minimum standards for solid waste handling established under Public Resources Code Section 43020 and applicable health requirements, or any successor statutes or requirements.

B. Identification. All Containers and vehicles used by Franchisee in the performance of Commercial Franchise Services shall be marked with Franchisee' s name in letters which are not less than four inches ( 4") high and which are easily read by the general public.

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C. Equipment.

1. Maintenance; Records. Franchisee shall, at all times, provide such number of vehicles and such equipment as will be adequate for the Commercial Franchise Services, which it is authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles must pass annual " BIT" and brake inspections and Franchisee shall provide evidence of such to the Public Works Department upon request. Upon request by the City, Franchisee shall provide records from the most recent California Highway Patrol biennial inspection of the terminal( s) responsible for the maintenance and repair of equipment used in the City. All vehicles shall be properlymaintained, kept clean and in good conditionand repair, shall not leak any fluids, and shall be uniformly painted. All Commercial Solid Waste and Divertible Materials Containers used in the performance of this Agreement shall be kept clean and in good repair, shall not leak any fluids, and shall be uniformly painted in the color identified by Franchisee in Franchisee' s application. All equipment required by City in the performance of this Agreement, including vehicle mirrors and the collision avoidance system, may be subject to inspection by the City upon twenty-four (24) hours' notice by the Public Works Director. All drivers employed by Franchisee and operating equipment in the City shall be properly licensed for the class of vehicle they drive, enrolled in the Department of Motor Vehicles Employee Pull Notice ( EPN) program, and abide by all State and federal regulations for driver hours and alcohol and controlled substances testing.

2. Solid Waste and Divertible Materials Retention. Each vehicle shall be so constructed and used in a manner so that no rubbish, garbage, debris, oil, grease or other material will blow, fall, or leak out of the vehicle. All Municipal Solid Waste and Divertible Materials shall be transported by means of vehicles that are covered in such a manner as to securely contain all Solid Waste and Divertible Materials and to prevent such Municipal Solid Waste and Divertible Materials from projecting, blowing, falling or leaking out of the vehicles. Any Municipal Solid Waste or Divertible Materials dropped or spilled in Collection, transfer or transportation shall be immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each vehicle for this purpose. In addition, each Collection vehicle shall be equipped with trash bags, masking tape and notice of non -Collection tags for the purpose of separating Hazardous Waste for return to the Generator. A communications device such as a two- way radio or a cellular telephone shall also be maintained on each vehicle at all times.

3. Vehicle Mirrors. All equipment used by Franchisee for Commercial Franchise Services in the City with a gross vehicle weight rating of twenty- six thousand 26,000) pounds or more shall be equipped with a convex mirror on the front of each vehicle, adjusted so as to enable the operator to see all points on an imaginary horizontal line which:
a) Is three feet ( 3) above the road;
b) Is one foot ( 1') directly forward from the midpoint of the front of the vehicles; and
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c) Extends the full width of the front of the vehicle.

4. Collision Avoidance System. All vehicles operated by Franchisee in the City shall include the best available collision avoidance system that is capable of detecting adjacent pedestrians and bicyclists. City reserves the right to inspect Franchisee's vehicles, at any time, to confirm that the installation and capability of Franchisee' s collision avoidance system is consistent with Section 18( C)( 4).

On or before January 1 of each year, Franchisee shall submit to City a certification signed under penalty of perjury containing the following:

List of any collection vehicle ( including front loader, rear loader, side loader, and roll off vehicles and all " spares") of such vehicles that franchisee operate in the City.
ii. Collision Avoidance System installed on each vehicle including name of system, manufacturer, date installed, name of Person who installed the system, name of Person( s) who tested the system to ensure proper installation and operation of system.

5. Storage. Franchisee shall not store any vehicle or equipment on any public street, public right-of-way or other public property in the City without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the Public Works Development.

6. Compliance. Should the Public Works Director at any time give written notification to Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Franchisee and not used again until inspected and authorized in writing by the Public Works Director.

7. City Standards. Placementof Containersand equipmentshall be in accordance with the standards set by the City.

8. Equipment Standards. All equipment provided by Franchisee shall be in accordance with standards set by the Public Works Department.

SECTION 19. ABANDONED CONTAINERS
A. If Franchisee abandons any Commercial Solid Waste or Divertible Materials Container within the City, the City may remove the Container and/or dispose of the contents of the Container and recover its cost from Franchisee.

B. For the purposes of this Section, " abandons" includes:

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1. Franchisee' s failure to remove the Container within the time period specified by the City Council upon termination of the Franchise pursuant to Section

12. 63. 140 of the Code, or any successor statute;

2. Franchisee' s failure to remove the Container within ten ( 10) calendar days after the expiration or termination of the Franchise granted to Franchisee, except in the case where Franchisee has been granted an extension of the Term of said Franchise or Franchiseehas beengranteda subsequentfranchiseauthorizingFranchiseeto Collect and transport the type or types of Commercial Solid Waste for which the Container was used pursuant to this Agreement; or

3. Franchisee' s failure to collect the Container and dispose of the contents of the Container within two ( 2) calendar days after the Public Works Director issues written notice to Franchisee to dispose of the contents.

4. Franchisee' s failure to replace a Container that fails to comply with the City's aestheticstandards, as set forth inthisAgreement, withinfive (5) calendardays of receiving written notice from the Public Works Director of non-compliance.

SECTION 20. COMPLIANCE WITH LAW
A. Franchisee shall perform all Commercial Franchise Services in accordance with applicable federal, state, and local law, including, but not limited to, Code Chapter

12. 63, Article XIII of the City Charter, Ordinance No. 2020- 20 and the terms and conditions of this Agreement.

B. During the Term of this Agreement, Franchisee and City agree that the City's ordinances may be amended as provided herein, as provided in Chapter 12.63 or as necessary to permit the City to comply with changes to federal, state, and local legislative regulatory requirements, which may affect or alter City's obligations or requirements for Commercial Solid Waste management. Franchisee agrees to comply with any such amendment of the City's ordinances without the need to amend this Agreement.

SECTION 21. PERMITS AND LICENSES
A. Applicable Permits and Licenses. Franchisee shall obtain and maintain, at Franchisee' s sole cost and expense, all permits and licenses applicable to Franchisee' s operations under the Franchise, which are required of Franchisee by any governmental agency. Payment of the Franchise Fee and Environmental Liability Fund Fee shall be in addition to any permit or license fees or business tax prescribed by the City for the same period.

B. Orange County Landfill Account. Franchisee shall obtain and maintain for the Term of this Agreement an account with the Orange County landfills. If Franchisee disposes of any Municipal Solid Waste collected from the City at an Orange County landfill, the Franchisee shall utilize its landfill account only ( no "cash" disposal).

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SECTION 22. PUBLIC EDUCATION ACTIVITIES
A. Informational Materials. Each year during the Term of this Agreement, Franchisee shall transmit informational materials to all Customers and to such prospective Customers as it may select, informing them of the Commercial Franchise Services that are required of them under State law as well as Hazardous Waste Disposal requirements.

B. Customer Compliance Notification. Each year during the Term of this Agreement, Franchisee shall notify all AB 1826 and AB 341 accounts for which it provides Commercial Franchise Services of the Customer' s compliance obligations.

C. Submission to City of Informational Materials. Franchisee' s informational materials shall be provided to the Public Works Director upon request if, in City's sole and absolute discretion, such informational materials are necessary for City to comply with State reporting requirements.

SECTION 23. SUSPENSION; TERMINATION; APPEAL
A. City' s Right to Suspend or Terminate. The Franchise granted to Franchisee may be suspended or terminated by the City Council pursuant to Code Section 12. 63. 140, or any successor statute.

B. Notice of Default. Should the Public Works Director determine Franchisee has defaulted in the performance of any obligation hereunder, the Public Works Director may provide written notice to Franchisee of such default (" Default Notice"). The Public Works Director may, in the Default Notice, set a reasonable time within which Franchisee may cure such default. Unless a longer or shorter time is otherwise specified by the Public Works Director, a reasonable time for correction shall be thirty (30) calendar days from the date the Default Notice is issued.

C. Public Works Director Review. Within ten ( 10) business days of the Public Works Director' s issuance of the Default Notice, at the request of Franchisee, the Public Works Director will hold a meeting with Franchisee to discuss the failure( s) described in the Default Notice. Such request shall immediately suspend any deadlines set forth in Agreement Section 23( B) or the Default Notice. During Franchisee' s meeting with the Public Works Director, Franchisee shall have an opportunity to present evidence explaining or justifying the failures described in the Default Notice. After the meeting, the Public Works Director will make a determination, in his or her sole discretion, as to whether to uphold the Default Notice, or any portion thereof, and shall issue such determination within five (5) business days of the meeting. Franchisee will have thirty (30) calendar days from the date the Public Works Director' s determination is issued to cure the upheld Default Notice or portion thereof.

D. Appeal to City Manager. Within five ( 5) business days of the Public Works Director issuing his/her determination, Franchisee may appeal the Public Works Director's determination, in writing, to the City Manager. City' s receipt of such appeal request shall immediately suspend any deadlines set forth in Agreement Section 23(C).

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The City Manager will hold a meeting with Franchisee no more than ten ( 10) business days after receiving Franchisee' s written appeal request. After the meeting, the City Manager will make a determination, in his or her sole discretion, as to whether to uphold the Default Notice, or any portion thereof, and shall issue such determination within five 5) business days of the meeting. The decision of the City Manager shall be final.

Franchisee will have thirty ( 30) calendar days from the date the City Manager' s determination is issued to cure the upheld Default Notice or any portion thereof.

F. Failure to Timely Cure. If Franchisee fails to timely cure a Default Notice, or any portion thereof, then the applicable liquidated damages set forth in Agreement Section 24 shall be final and conclusive and the amount( s) shall be immediately due and payable. Franchisee' s failure to timely cure three (3) Default Notices shall be a material breach of this Agreement.

G. Audit Findings. Notwithstanding anything to the contrary, if Franchisee disagrees with City's audit findings, then Franchisee may, within ten ( 10) business days after service of the audit finding, appeal to the City Manager specifying the basis for its disagreement with City' s audit findings. If Franchisee fails to timely request such an appeal, then the discrepancy determinations shall be final and conclusive and the violation shall be deemed established.

H. Termination Without Right to Cure. City shall have the right of suspension or termination as a result of Franchisee' s failure to timely cure any deficiency or default as set forth above, which right is in addition to City' s right to terminate this Agreement without affording Franchisee an opportunity to cure in circumstances where Franchisee is determined to have materially breached this Agreement. Notwithstanding anything to the contrary, in the event of any material breach hereof, City shall have the right to terminate this Agreement without affording Franchisee the right to cure including, without limitation, any action, inaction or circumstance defined herein as a material breach and/or under any of the following circumstances which are hereby defined as material breaches:

If Franchisee conducts, or attempts to conduct, fraud upon City.

2. If Franchisee becomes insolvent, unable, or unwilling to pay its debts.

3. If Franchisee fails to materially comply with any insurance or indemnification requirement set forth in this Agreement; provided, however, that Franchisee shall have a reasonable opportunity to cure any default relating to the Franchisee' s failure to provide the City with proof of insurance, so long as such insurance is in effect at all times.

4. If City is required to pay any fine or penalty, which Franchisee is required by the terms hereof to pay, yet which Franchisee fails, refuses, neglects or is unable to timely pay.

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5. If Franchisee fails to submit Records thirty ( 30) calendar days or more following a written request by City, or its designated representative for Records disclosure.

6. Franchisee fails to meet the Diversion requirements of this Agreement or pursuant to applicable laws.

I. Removal of Commercial Solid Waste and Divertible Materials Containers; Customer Notification. In the event this Franchise is terminated or expires without a grant of a subsequent franchise allowing Franchisee to continue performing Commercial Franchise Services in City, then within ten ( 10) calendar days of such termination or expiration Franchisee shall:

1. Remove all of Franchisee' s Municipal Solid Waste and Divertible Materials Containers from all Franchisee' s Collection service locations and properly dispose of all Municipal Solid Waste in such containers and deliver all Divertible Materials to Processing Facilities for Diversion within the time period specified by the City Council; and

2. Submit to the Public Works Director a list of the names and addresses of Generators in the City for which Franchisee provided Commercial Franchise Services as of the date of termination or expiration ( i. e., Franchisee' s City of Newport Beach customer list); or

3. Send written notification to each Solid Waste Generator, AB 341 Generator and AB 1826 Generator on Franchisee' s customer list that Franchisee is no longer authorized to provide Commercial Franchise Services in the City. Such notification shall be in the form provided by the Public Works Director and shall be personally delivered or shall be sent by first class mail, postage prepaid, to the customers' billing addresses. Franchisee shall submit to the Public Works Director an affidavit, signed under penalty of perjury, stating that the required notification has been provided by Franchisee to all of Franchisee' s City Customers.

Continuing Obligations. Upon Agreement termination, suspension or expiration:

1. Franchisee shall have no right or authority to engage in Commercial Franchise Services in the City, subject to the provisions of Sections 49520-49524 of the Public Resources Code, or any successor statutes.

2. Franchisee shall remain liable to City for any and all Franchise Feesand Environmental Liability Fund Fees that would otherwise be payable by Franchisee, for any and all liquidated damages, late charges and/or interest assessed.

3. Franchisee shall have a continuing obligation to submit to City all reports and records required by this Agreement. Franchisee' s obligation shall survive this Agreement shall continue for such period of time as required by this Agreement or applicable law.

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4. Franchisee shall allow the Commercial Solid Waste Generators, AB 341 Generators and AB 1826 Generators served by Franchisee to arrange for Commercial Franchise Services with another Franchise Holder or Person authorized to performsuch services, without penaltyor liabilityfor breachof contracton the part of the generators, for such period of time as Franchisee is not authorized to perform such services because of termination or suspension.

5. Franchisee shall have a continuing obligation to provide the indemnifications required in this Agreement. Such indemnifications include, but are not limited to, the Hazardous Materials indemnification and AB 939, AB 341, and AB 1826 indemnifications asset forth in Agreement Section 10.

SECTION 24. CITY' S REMEDIES
A. The City incurred considerable time and expense procuring this Agreement to secure an improved level and quality of Recycling and compliance with State Diversion mandates.

B. Liquidated Damages. The Parties agree the following liquidated damages schedule represents a reasonable estimate of the amount of damages, considering all the circumstancesexistingon the dateof this Agreement, includingthe relationshipof the sums to the range of harm to City that reasonably could be expected in anticipation that proof of actual damages would be costly or inconvenient:

Applicable Failure( s)* Damages
Section( s)
6( A), 7( A) Comply with City -mandated Diversion Two hundred fifty requirements within thirty ( 30) calendar dollars ($ 250) per days of notification by City business day until
compliant
6( B), 7( B) Deliver Commercial Solid Waste as Two hundred fifty designated dollars ($ 250) per
truck delivery
8( B) Provide requested records Two hundred fifty
dollars ($ 250) per
business day until
completed
11( A) Provide only those Commercial Two hundred fifty
Franchise Services for which Franchisee dollars ($ 250) has applied
11( C) Collect at unauthorized locations and/ or Two hundred fifty during unauthorized hours five ( 5) or dollars ($ 250)
more times in a twelve ( 12) month period
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11( D) Label Containers; paint vehicles and/ or Fifty dollars ($ 50) Containers corporate color per business day
until corrected
12( A), 12( C), Implement AB 341 Diversion Program One thousand Exhibit E, Parts A, including Tasks 1- 16 in Exhibit E, Part A dollars ($ 1,000) per B and C within the timeframe in Franchise occurrence
Section 12C. Comply with the
requirements of Exhibit E, Parts B and C
within ninety ( 90) days of the events
described in Part B, or within ninety ( 90)
days of a previously operating AB 341
Program malfunctioning as required by
Part C.
13( A), 13( C), Implement AB 1826 Food Scrap One thousand Exhibit E, Parts A, Diversion Program including Tasks 1-16 dollars ($ 1, 000) B and C in Exhibit E, Part A, within the timeframe
in Franchise Section 13C. Comply with
the requirements of Exhibit E, Parts B
and C within ninety ( 90) days of the
events described in Part B or within
ninety ( 90) days of a previously
operating Food Scrap Diversion Program
malfunctioning as required by Part C.
14( A), 14( C), Implement AB 1826 Green Waste and Five hundred dollars Exhibit E, Parts A, Wood Waste Diversion Program 500)
Band C including Tasks 1-16 in Exhibit E, Part A,
within the timeframe in Franchise
Section 14C. Comply with the
requirements of Exhibit E, Parts B and C
within ninety ( 90) days of the events
described in Part B or within ninety ( 90)
days of a previously operating Green
Waste and Wood Waste Diversion
Program malfunctioning as required by
Part C.
15( B) Implement Construction and Demolition One thousand Diversion Program dollars ($ 1, 000)
16( A), 16( B), 16( E) Submit complete and accurate monthly One hundred dollars reports 100) per business
day until corrected
or completed
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16( C) Submit timely monthly reports One hundred dollars 100) — if not
submitted when due
Five hundred dollars
500) — if not
submitted w/ in thirty
30) calendar days
after due date
17 Designate qualified Hauler Fifty dollars ($ 50)
Representative; Failure of Hauler per business day
Representative to timely respond to City until completed 18( C) Secure or maintain vehicles or vehicle One hundred dollars equipment 100) per business
day until completed
19 Remove, replace, or collect abandoned Fifty dollars ($ 50) Container( s) per business day
until completed
Unless otherwise designated, reference to " failure( s)" refers to each occurrence of specified breach ( such as for each Customer or each Customer record entry or complaint) and not for aggregate occurrences of those breaches ( such as for all Customers on a given route or day).

C. City' s Remedies Cumulative. The rights and remedies of City set forth herein shall be in addition to any and all other rights and privileges City may have, and shall not be deemed to limit any such other rights or privileges of City under this Agreement or by virtue of any law.

By placing its initials below, each party specifically confirms:
1) the accuracy of the statements made in Agreement Section 24; and 2) it has had ample opportunity to consult with legal counsel and obtain an explanation of liquidated damage provisions prior to signing this Agreement.

FRANCHISEE CITY
Initial Here: Initial Here:

SECTION 25. CONFIDENTIAL INFORMATION.

A. Confidential Information. In the performance of this Agreement or in contemplation thereof, the parties and their respective employees and agents may have access to privateor confidential informationowned or controlled by the other party and such information may contain proprietary details and disclosures. All information and Non- exclusive Franchise Agreement Page 40
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data identified in writing as proprietary or confidential by either party (" Confidential Information") and so acquired by the other party or its employees or agents under this Agreement or in contemplation thereof shall be and shall remain the disclosing party' s exclusive property. The recipient of Confidential Information shall use all reasonable efforts ( which in any event shall not be less than the efforts the recipient takes to ensure the confidentiality of its own proprietary and other confidential information) to keep, and have its employees and agents keep, any and all Confidential Information confidential, and shall not copy, or publish or disclose it to others, nor authorize its employees, agents or anyone else to copy or disclose it to others, without the disclosing party's written approval; nor shall the recipient make use of the Confidential Information except for the purposes of executing its obligations hereunder, and (except as provided for herein) shall return the Confidential Information and data to the first party at its request. The City' s duty to maintain confidentiality as described hereunder shall be subject to the laws of the State of California.

B. Excluded Information. The foregoing conditions will not apply to information or data which is, or which becomes generally known to the public by publication or by any means other than a breach of duty on the part of the recipient hereunder, is information previously known to the recipient, is information independently developed by or for the recipient or is information generally released by the owning party without restriction.

C. Public Records Request. Should City receive a public records request, or otherwise be directed by any governmental authority to disclose any or all Confidential Information in City's possession, custody or control, City shall promptly provide notice to Franchisee of such request to allow Franchisee an opportunity to prevent disclosure.

D. Right to Injunctive Relief. Because of the unique nature of the Confidential Information, the parties agree that each party may suffer irreparable harm in the event that the other party fails to comply with any of its obligations under this Section, and that monetary damages may be inadequate to compensate either party for such breach.

Accordingly, the parties agree that either party will, in addition to any other remedies available to it at law or in equity, be entitled to seek injunctive relief to enforce the terms of this Section.

SECTION 26. ASSIGNMENT
Franchisee shall not assign, sell, subcontract, transfer or otherwise delegate its authority to perform any portion of the Commercial Franchise Services or obligations under the Franchise without prior express consent of the City Council. This prohibition includes any transfer of ownership or control of Franchisee, or the conveyance of a majority of Franchisee' s stock to a new controlling interest. City's consent shall not be unreasonably withheld.

SECTION 27. MISCELLANEOUS PROVISIONS
A. Notices. Except as otherwise provided in this Agreement, all notices required by this Agreement shall be given by personal service or by deposit in the United States mail, postage pre -paid and return receipt requested, addressed to the parties as follows:

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To: Public Works Director
City of Newport Beach
P. O. Box 1768
100 Civic Center Dr.

Newport Beach, CA 92660
To Franchisee:

Notice shall be deemed effective on the date personally served or, if mailed, three 3) calendar days after the date deposited in the mail.

B. Integrated Agreement. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the City and Franchisee, and all preliminary negotiations and other agreements of any kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein.

C. Amendments. This Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally, and no modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by both parties.

D. Recitals. The Parties acknowledge that the Recitals are true and correct and are hereby incorporated by reference into this Agreement.

E. Applicable Law. The laws of the City, State of California, and applicable Federal law, shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange.

F. Authority. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing.

G. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect.

H. Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a difference character.

I. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply.

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J. Equal Opportunity Employment. Franchisee represents that it is an equal opportunity employer and it shall not discriminate against any authorized subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age or any other impermissible basis under law.

K. Compliance with Laws. Franchisee shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted.

Franchisee agrees to obtain a business license from the City in accordance with the Code.

The parties hereto agree that the Franchise and this Agreement are the only authorizations to conduct Commercial Franchise Services in the City and that the issuance of a business license does not grant the Franchisee a right to conduct Commercial Franchise Services or other business in the City.

L. Conflicts of Interest. Franchisee and its employees may be subject to the provisions of the California Political Reform Act of 1974 (the " California Political Reform Act"), which ( i) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and ( ii) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the California Political Reform Act, Franchisee shall conform to all requirements of the California Political Reform Act.

Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Franchisee shall indemnify and hold harmless City for any and all claims for damages resulting from Franchisee' s violation of this subsection.

M. Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern.

N. No Attorneys' Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees.

O. Counterparts. This Agreement may be executed in two ( 2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one ( 1) and the same instrument.

SIGNATURES ON FOLLOWING PAGE]
Non- exclusive Franchise Agreement Page 43
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year written below.

APPROVED AS TO FORM:

CITY ATTORNEY' S OFFICE
Date:
in
Aaron C. Harp
City Attorney
ATTEST:

Date:

CITY OF NEWPORT BEACH,
a California municipal corporation
Date:

By:

Will O' Neill
Mayor
FRANCHISEE:

Date:

By: By:_
Leilani I. Brown
City Clerk
Date:
go
END OF SIGNATURES]
Attachments: Exhibit A — Faithful Performance Bond
Exhibit B — Franchise Hauler Acknowledgement
Exhibit C — Franchisee Application Template
Exhibit D — Insurance Requirements
Exhibit E — Required Tasks for Implementation of Diversion Programs Exhibit F — Construction and Demolition Debris Diversion Program Non- exclusive Franchise Agreement Page 44
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EXHIBIT A

CITY OF NEWPORT BEACH
BOND NO.

FAITHFUL PERFORMANCE BOND
The premium charges on this Bond is $
WHEREAS, the City of Newport Beach, State of California, has awarded to hereinafter designated as the
Principal," a Non- exclusive Franchise for Commercial Solid Waste and Divertible Materials Handling Services (" Franchise Agreement") in the City of Newport Beach, in strict conformity with the Franchise Agreement on file with the office of the City Clerk of the City of Newport Beach, which is incorporated herein by this reference.

WHEREAS, Principal has executed or is about to execute the Franchise Agreement and the terms thereof require the furnishing of a Bond for the faithful performance of the Franchise Agreement.

NOW, THEREFORE, we, the Principal, and
duly authorized to
transact business under the laws of the State of California as Surety ( hereinafter Surety"), are held and firmly bound unto the City of Newport Beach, in the sum of Seven Thousand Five Hundred Dollars and 00/ 100 ($ 7, 500. 00) lawful money of the United States of America, to be paid to the City of Newport Beach, its successors, and assigns; for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors, or assigns, jointly and severally, firmly by these present.

THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal, or the Principal' s heirs, executors, administrators, successors, or assigns, fail to abide by, and well and truly keep and perform any or all the services, covenants, conditions, and agreements in the Franchise Agreement documents and any alteration thereof made as therein provided on its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to its true intent and meaning, or fails to indemnify, defend, and save harmless the City of Newport Beach, its officers, employees and agents, as therein stipulated, then, Surety will faithfully perform the same, in an amount not exceeding the sum specified in this Bond; otherwise this obligation shall become null and void.

As a part of the obligation secured hereby, and in addition to the face amount specified in this Performance Bond, there shall be included costs and reasonable expenses and fees, including reasonable attorney' s fees, incurred by City, only in the event City is required to bring an action in law or equity against Surety to enforce the obligations of this Bond.

Surety, for value received, stipulates and agrees that no change, extension of time, alterations or additions to the terms of the Franchise Agreement or to the services to be performed thereunder shall in any way affect its obligations on this Bond, and it does Faithful Performance Bond Page A- 1
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hereby waive notice of any such change, extension of time, alterations or additions of the Agreement or to the services or to the specifications.

This Faithful Performance Bond shall be extended and maintained by the Principal in full force and effect for seven ( 7) years following the date Principal is granted the Franchise Agreement by City.

In the event that the Principal executed this bond as an individual, it is agreed that the death of any such Principal shall not exonerate the Surety from its obligations under this Bond.

IN WITNESS WHEREOF, this instrument has been duly executed by the Principal and Surety above named, on the day of , 20
Name of Contractor ( Principal)
Name of Surety
Address of Surety
Telephone
APPROVED AS TO FORM:

CITY ATTORNEY' S OFFICE
Date:

Aaron C. Harp
City Attorney
Authorized Signature/ Title
Authorized Agent Signature
Print Name and Title

NOTARY ACKNOWLEDGMENTS OF

CONTRACTOR AND SURETY MUST BE ATTACHED
Faithful Performance Bond Page A- 2
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ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of SS.

On 20 before me,
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name( s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/ her/ their authorized capacity( ies), and that by his/her/their signatures( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature

State of California
seal)
County of } ss.

On 20 before me,
Notary Public, personally appeared
proved to me on the basis of satisfactory evidence to be the person(s) whose name( s) is/are subscribed to the within instrument and acknowledged to me that he/she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/ their signatures( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature seal)
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EXHIBIT B

FRANCHISE HAULER ACKNOWLEDGEMENT
THIS FRANCHISE HAULER ACKNOWLEDGMENT is entered into as of this _ day of , 2021 ( the " Acknowledgment"), by and between the City of Newport Beach, a charter city and municipal corporation ( the "City"), and ( the Franchise Hauler").

WITNESSETH
WHEREAS, the City and the Franchise Hauler have heretofore entered into an agreement entitled NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY

OF NEWPORT BEACH AND FOR COMMERCIAL SOLID WASTE
AND DIVERTIBLE MATERIALS HANDLING SERVICES ( the " Franchise"); and WHEREAS, the Franchise provides for the collection and disposal of certain municipal commercial solid waste as described therein (" Franchise Waste") generated within the City; and
WHEREAS, the County of Orange ( the "County") owns, manages and operates a sanitary landfill disposal system for municipal solid waste generated within the County; and
WHEREAS, the City and the County have heretofore entered into a Waste Disposal Agreement as of 2009, and subsequent Amendment to the Waste Disposal Agreement dated April 28, 2016 ( collectively, the "Disposal Agreement"), determining that the execution of such Disposal Agreement will serve the public health, safety and welfare of the residents of the City and County, by maintaining public ownership and stewardship over the Orange County Landfill Disposal System (the " Disposal System"); and WHEREAS, under the Disposal Agreement, the County has agreed to provide long-term disposal of all municipal solid waste generated within the City and the City has agreed to exercise all legal, and contractual power which it possesses from time to time to deliver or cause the delivery of such waste to the Disposal System; and WHEREAS, the provisions of the Waste Disposal Agreement which guarantee capacity for the long term disposal of waste at specified rates generated in the City provide significant benefits to the Franchise Hauler; and WHEREAS, notwithstanding any Franchise provisions to the contrary, the Franchise Hauler explicitly acknowledges the aforementionedbenefits to the City, the County and the Franchise Hauler in providing for the disposal of all Franchise Waste to the Disposal System; and
WHEREAS, the City and the Franchise Hauler desire to enter into this Acknowledgment to assure that the City and the Franchise Hauler will be entitled to the benefits of the Waste Disposal Agreement and to assure conformity with the waste Franchise Hauler Acknowledgement Page B- 1
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delivery obligations which have been agreed to by the City under the Disposal Agreement through the delivery of waste by the Franchise Hauler to the Disposal System; and WHEREAS, the Franchise Hauler' s agreement to deliver Franchise Waste to the Disposal System under this Acknowledgment is given in consideration of the Franchise Hauler' s right to receive the Contract Rate for such disposal as provided in the Disposal Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Capitalized terms used and not otherwise defined herein are used as defined in the Disposal Agreement.

2. The Franchise Hauler hereby waives any right which it may possess under applicable law to contest on any ground, constitutional, statutory, case law, administrative or otherwise, ( a) the right, power or authority of the County or the City to enter into or perform their respective obligations under the Disposal Agreement, ( b) the enforceability against the County or the City of the Disposal Agreement, or ( c) the right, power or authority of the City to deliver or cause the delivery of all Controllable Waste to the Designated Disposal Facility in accordance with this Acknowledgment.

3. The City and the Franchise Hauler each hereby represent that this Acknowledgment has been duly authorized by all necessary action of their respective governing bodies.

4. The Franchise Hauler shall deliver or cause to be delivered all Controllable Waste including all residue from the processing by any means, wherever conducted, of Controllable Waste) to the Disposal System, and shall otherwise assist the City in complying with its obligations under the Waste Disposal Covenant in Section 3. 1 of the Disposal Agreement.

5. The Franchise Hauler shall not haul Controllable Waste to any materials recovery facility, composting facility, intermediate processing facility, recycling center, transfer station or other waste handling or management facility unless the contract or other agreement or arrangement between the Franchise Hauler and the operator of such facility is sufficient in the opinion of the County to assure that the Residue from such facility constituting City Acceptable Waste ( or Tonnage equivalencies) and the City Acceptable Waste transferred by such facility shall be delivered to the Designated Disposal Facility in compliance with the Waste Disposal Covenant.

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6. The Franchise Hauler shall pay the Contract Rate imposed by the County at the Designated Disposal Facility for the disposal of all Controllable Waste, which rate shall be subject to potential adjustment necessary to reflect the circumstances set forth in the Disposal Agreement.

7. Nothing in this Acknowledgment is intended to restrict any right or responsibility explicitly given the Franchise Hauler in the Franchise to recycle City Acceptable Waste, except as provided in paragraph 5 above with respect to Residue from any such recycling operations.

8. The obligations of the Franchise Hauler under this Acknowledgment shall apply notwithstanding any provision of the Franchise which may conflict herewith.

9. This Acknowledgment may be enforced by the City by any available legal means.

In any enforcement action by the City, the burden of proof shall be on the Franchise Hauler to demonstrate compliance herewith.

10. This Acknowledgment shall be in full force and effect and shall be legally binding upon the City and Franchise Hauler from the date hereof and shall continue in full force and effect until the earlier of ( i) the end of the term of the Franchise or ( ii) the end of the term of the Disposal Agreement.

11. The City and Hauler agree that the County shall be an express third party beneficiary of this Acknowledgment, and shall be entitled to independently enforce the obligations of the Franchise Hauler hereunder.

12. Franchise Hauler agrees to assist the County in verifying tonnage collected by the Franchise Hauler and providing information required by the County. Franchise Hauler will provide upon request refuse tonnage collected within the County, and outside the County ( if relevant to confirming tonnage origination), separated by jurisdiction, by load type ( residential, commercial, roll -off box), and by facility to which it was delivered ( specify which landfill or transfer station). Franchise Hauler will provide customer service levels and route lists. Franchise Hauler will cooperate with County audits to verify reported origin of tonnage by making records and personnel available to the County and/or its auditors.

Franchise Hauler Acknowledgement Page B- 3
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EXHIBIT C

FRANCHISE APPLICATION TEMPLATE
Franchisee Application Template Page C- 1
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EXHIBIT D

INSURANCE REQUIREMENTS

1. Provision of Insurance. Without limiting Franchisee' s indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Franchisee agrees to provide insurance in accordance with requirements set forth here. If Franchisee uses existing coverage to comply and that coverage does not meet these requirements, Franchisee agrees to amend, supplement or endorse the existing coverage.

2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- ( or higher) and Financial Size Category Class VII ( or larger) in accordance with the latest edition of Best' s Key Rating Guide, unless otherwise approved by the City' s Risk Manager.

3. Coverage Requirements.

A. Workers' Compensation Insurance. Franchisee shall maintain Workers' Compensation Insurance, statutory limits, and Employer' s Liability Insurance with limits of at least One Million Dollars ($ 1,000, 000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code.

Franchisee shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its City Council, boards and commissions, officers, agents, volunteers, employees, and any person or entity owning or otherwise in legal control of the property upon which Contractor performs the Project and/ or Services contemplated by this Agreement.

B. General Liability Insurance. Franchisee shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than Two Million Dollars ($ 2, 000, 000) per occurrence, Four Million Dollars 4, 000, 000) general aggregate and Four Million Dollars ($ 4, 000, 000) completed operations aggregate. The policy shall cover liability arising from premises, operations, products -completed operations, personal and advertising injury, and liability assumed under an insured contract ( including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract.

C. Automobile Liability Insurance. Franchisee shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Franchisee arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than Ten Million Dollars ($ 10, 000, 000) combined single limit for each accident.

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D. Pollution Liability Insurance. Franchisee shall maintain pollution liability insurance covering all of the Franchisee' s operations to include onsite and offsite coverage for bodily injury ( including death and mental anguish), property damage, non - owned disposal site liability, defense costs, cleanup costs, and pollution conditions that arise from or in connection with the transportation ( including loading and unloading) by or on behalf of the Franchisee, of any waste or waste materials. Coverage shall be provided for both sudden and accidental and gradual and continuous pollution events with limits no less than $ 5, 000, 000 each loss and $ 10, 000, 000 in the aggregate. The policy shall not exclude any hazardous materials for which there is an exposure. If all or any portion of the pollution liability coverage is available only on a claims -made basis, then a 10-year extended reporting period shall also be purchased. The policy shall not contain any provision or exclusion ( including any so- called " insured versus insured" exclusion or cross -liability" exclusion) the effect of which would be to prevent, bar, or otherwise preclude any insured or additional insured under the policy from making a claim which would otherwise be covered by such policy on the grounds that the claim is brought by an insured or additional insured against an insured or additional insured under the policy.

4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions:

A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its City Council, boards and commissions, officers, agents, volunteers, employees, and any person or entity owning or otherwise in legal control of the property upon which Franchisee performs the Services contemplated by this Agreement or shall specifically allow Franchisee or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Franchisee hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subcontractors.

B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability ( if required), shall provide or be endorsed to provide that City a its City Council, boardsand commissions, officers, agents, volunteers, employees, and any person or entity owning or otherwise in legal control of the property upon which Franchisee performs the Services contemplated by this Agreement shall be included as additional insureds under such policies.

C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self- insurance maintained by City.

D. Notice of Cancellation. All policies shall provide City with thirty ( 30) days notice of cancellation ( except for nonpayment for which ten ( 10) days notice is required) or nonrenewal of coverage for each required coverage.

5. Additional Agreements Between the Parties. The parties hereby agree to the following:

A. Evidence of Insurance. Franchisee shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a Insurance Requirements Page D- 2
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waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. The certificates and endorsements for each insurance policy shall be signed by a personauthorizedby that insurerto bindcoverageon its behalf. At leastfifteen (15) days prior to the expirationof any such policy, evidenceof insuranceshowingthat such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced, Franchisee shall, within ten ( 10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insuranceshowingthatthe requiredinsurancehas beenreinstatedor has been provided through another insurance company or companies. City reserves the right to require complete, certified copies of all required insurance policies, at any time.

B. City' s Right to Revise Requirements. The City reserves the right at anytime duringthe termof this Agreementto changethe amountsandtypes of insurance required by giving the Franchisee sixty (60) days advance written notice of such change.

C. Right to Review Subcontracts. Franchisee agrees that upon request, all contracts with subcontractors or others with whom Franchisee enters into contracts with on behalf of City will be submitted to City for review. Failure of City to request copies of such contractswill not impose any liability on City, or its employees. Franchiseeshall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Franchisee shall ensure that City is an additional insured on insurance required from subcontractors. For CGL coverage, subcontractors shall provide coverage with a format at least as broad as CG 20 38 04 13.

D. Enforcement of Contract Provisions. Franchisee acknowledges and agrees that any actual or alleged failure on the part of the City to inform Franchiseeof non-compliancewith any requirement imposes no additionalobligations on the City nor does it waive any rights hereunder.

E. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertainsto a given issue and is not intendedby any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type.

F. Self - insured Retentions. Any self -insured retentions must be declared to and approved by City. City reserves the right to require that self -insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these requirements unless approved by City.

G. City Remedies for Non Compliance. If Franchisee or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Franchisee' s right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Franchisee or reimbursed by Franchisee upon demand.

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H. Timely Notice of Claims. Franchisee shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Franchisee' s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City.

I. Franchisee' s Insurance. Franchisee shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Franchise.

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EXHIBIT E

REQUIRED TASKS FOR IMPLEMENTATION OF DIVERSION PROGRAMS A. For purposes of complying with Sections 12 through 14 of this Agreement Franchisee shall complete all of the following to the satisfaction of the City:

1. Franchisee has contacted the Authorized Customer Representative.

For purposes of this section, the " Authorized Customer Representative" is the Person who subscribes to and pays for any service provided by the Franchisee and/or for any Municipal Solid Waste Collection or Diversion Services provided by any other entity. The Authorized Customer Representative may be the owner or on - site manager; or if Customer is a corporation with multiple locations and centralized decision -making, the manager with decision -making authority; or in the case of a broker or waste arranger, the Authorized Customer Representative is the Person who has the decision -making authority to subscribe to and pay for Municipal Solid Waste Collection and Diversion Services. Franchisee shall provide written notice of the requirements of the Act and the City Code for the Customer to have in place specified Diversion Program( s) as of the date(s) applicable to that Customer. If applicable, Franchisee shall also provide written notice of the requirements of CalGreen.

2. Franchisee shall estimate the quantities of Municipal Solid Waste, Recyclable Materials, Food Scraps ( for businesses), Green Waste/ Wood and any other Divertible Materials generated by the Customer, calculate the appropriate number and size of Containers required for storage, calculate the recommended frequency of service to optimize cost for the Customer, prepare a written Diversion Plan containing estimated costs and recommended levels of service, and submit the Plan to the Authorized Customer Representative. Franchisee shall discuss the Plan with the Authorized Customer Representative and obtain the Authorized Customer Representative' s approval to implement the finalized Diversion Plan.

3. If the Customer is generating Food Scraps, Franchisee shall provide the Authorized Customer Representative with information on the available edible food donation programs in City including coordinators, vendors and non-profit agencies, as directed by City, and shall factor any applicable edible food donation opportunities into the calculations for sizing of Food Scrap Containers and frequency of Food Scrap Collection service. Franchisee shall cooperate fully and in good faith with all edible food donation efforts of City, all third parties and Customer.

4. If the Customer is already Diverting Recyclable Materials and/or Food Scraps using an in-house program, backhauling, on site processing, self - hauling, or donating or selling materials to a third party, Franchisee shall notify City so City can obtain a completed and signed " Self - Certification Form" for that program. Franchisee shall record the notification to City on the "Exhibit E Tracking Document" described in subpart D herein. City will obtain a completed Self - Required Tasks For Implementation Of Diversion Programs Page E- 1 13-63
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Certification Form, evaluate the information provided and take steps to verify the in- house program( s). City will inform the Franchisee of City' s decision regarding the adequacy of the in-house program( s).
i) In the event City notifies the Franchisee that the in-house program( s) are inadequate, Franchisee shall comply with all the requirements contained in Sections 12, 13, 14 and in this Exhibit E to fully implement all Diversion Programs required by this Franchise. ii) In the event City notifiesthe Franchiseethat some, but notall, of the in-house program( s) are adequate, ( a) Franchisee shall be relieved from its responsibility to implement the Diversion Programs targeting materials that are being Diverted by the City -verified in-house program( s) for a period of 12 months; and ( b) Franchisee shall comply with all the requirements contained in this Exhibit E to fully implement all Diversion Programs for Recyclable Materials, Food Scraps, Green Waste and Wood Waste not adequately Diverted through the City -verified in- house program( s). At the end of twelve 12) months, Franchisee shall submit a written request to City to determine whether the Customer filed a new Self - Certification Form and whether the City has determined that any of the Customer' s in- house program( s) are adequate. If so, Franchisee shall record this in the Exhibit E Tracking Document and shall be relieved from its responsibility to implement the Diversion Programs targeting materials that are being Diverted by the City -verified in-house program(s) for an additional period of 12 months. Franchisee shall continue to provide and maintain all Diversion Programs required by this Franchise for which there is no City -verified in-house program( s).

This process shall be repeated by Franchisee annually as long as the Customer is served by the Franchisee at the same premises. In the event a Customer ceases operation of any or all of its in-house program(s) and/or the City makes a determinationthat any or all of the previously City -verified in-house program(s) are no longer operating or are no longer adequate, then Franchisee shall comply with all the requirements contained in Sections 12, 13, 14 and in this Exhibit E to fully implement all Diversion Programs required by this Franchise.
iii) In the event City notifies the Franchisee that the in- house program( s) are adequate, Franchisee shall be relieved from its responsibility to implement the Diversion Programs targeting materials that are being Diverted by the City -verified in-house program( s) for a period of 12 months. At the end of twelve ( 12) months, Franchisee shall submit a written request to City to determine whether the Customer filed a new Self -Certification Form and whether the City has determined that the in-house program( s) are adequate. If the City determines any or all of the in-house programs are adequate, Franchisee shall record this in the Exhibit E Tracking Document and shall be relieved from its Required Tasks For Implementation Of Diversion Programs Page E- 2 13-64
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responsibility to implement the Diversion Programs targeting materials that are being Diverted by the City -verified in-house program( s) for an additional period of 12 months. Franchisee shall continue to provide and maintain all Diversion Programs required by this Franchise for which there is no City -verified in-house program( s).

5. If the Customer is using a landscaping company to haul away Green Waste/ Wood, Franchisee shall notify City so City can obtain a completed and signed " Landscaper Self - Certification Diversion Form" for Green Waste/ Wood at that Premises. Franchisee shall record the notification to City on the Exhibit E Tracking Document. City will obtain a completed Self -Certification Form, and take' steps to verify the landscaper program( s). City will inform the Franchisee of City' s decision regarding the adequacy of the landscaper program(s). i) In the event City notifies the Franchisee that the landscaper program( s) are inadequate, Franchisee shall comply with all the requirements contained in Section 14 and in this Exhibit E to fully implement all Diversion Programs for Green Waste/ Wood required by this Franchise.
ii) In the event City notifies the Franchisee that some, but not all, of the landscaper program( s) are adequate, ( a) Franchisee shall be relieved from its responsibility to implement the Diversion Programs targeting Green Waste and/or Wood Waste that is being Diverted by the City -verified landscaper program( s) for a period of 12 months; and ( b) Franchisee shall comply with all the requirements contained In Section 14 and in this Exhibit E to fully implement all Diversion Programs for Green Waste and/ or Wood Waste not adequately Diverted through the City -verified landscaper program( s). At the end of twelve ( 12) months, Franchisee shall submit a written request to City to determine whether the Customer filed a new " Landscaper Self -Certification Form" and whether the City has determined that any or all of the Customer' s landscaper program( s) are adequate. If the City has determined that any or all of the in-house program( s) are adequate, Franchisee shall record this in the Exhibit E Tracking Document and shall be relieved from its responsibility to implement the Diversion Programs targeting Green Waste and/ or Wood Waste that are being Diverted by the City -verified landscaper program( s) for an additional period of twelve ( 12) months. Franchisee shall continue to provide and maintain all Diversion Programs required by this Required Tasks For Implementation Of Diversion Programs Page E- 3 13-65
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Franchise for which there is no City -verified in-house program( s).

This process shall be repeated by Franchisee annually as long as the Customer is served by the Franchisee at the same premises. In the event a Customer ceases operation of any or all of its landscaper program(s) and/or the City makes a determination that any or all of the previously City -verified landscaper program( s) are no longer operating or are no longer adequate, then Franchisee shall comply with all the requirements contained in Section 14 and in this Exhibit E to fully implement all Diversion Programs for Green Waste and Wood Waste required by this Franchise.
iii) In the event City notifies the Franchisee that the landscaper program( s) are adequate, Franchisee shall be relieved from its responsibility to implement the Diversion Programs targeting Green Waste and Wood Waste that are being Diverted by the City -verified landscaper program( s) for a period of twelve (12) months. At the end of twelve ( 12) months, Franchisee shall submit a written request to City to determine whether the Customer filed a new " Landscaper Self -Certification Form" and whether the City has determined that the landscaper program( s) are adequate. If so, Franchisee shall record this in the Exhibit E Tracking Document and shall be relieved from its responsibility to implement the Diversion Programs targeting Green Waste and Wood Waste that are being Diverted by the City - verified landscaper program( s) for an additional period of twelve ( 12) months. This process shall be repeated by Franchisee annually as long as the Customer is served by the Franchisee at the same premises. In the event a Customer ceases operation of its landscaper program( s) and/ or the City makes a determination that the landscaper program( s) are no longer adequate, then Franchisee shall comply with all the requirements contained in Section 14 and in this Exhibit E to fully implement all Diversion Programs for Green Waste and Wood Waste required by this Franchise.

6. In the event Franchisee has taken all required actions and completed all required tasks in Steps 1 through 5 herein, and the Authorized Customer Representative has refused the service or has refused to implement all of the recommended programs in the Diversion Plan(s) prepared by the Franchisee, the Franchisee shall notify the City of the Customer' s refusal. The Franchisee shall request that the City or its agent accompany the Franchisee on a site visit to the Customer' s premises to meet with the Authorized Customer Representative to explain the requirements of the Act and the City Code that require implementation of the Diversion Program(s) described in the Plan prepared by the Franchisee and submitted to the Authorized Customer Representative in Step 2. If, after a site visit with the City and the Franchisee, the Authorized Customer Representative continues to refuse to implement the recommended Diversion Program( s) contained in the Plan submitted to the Authorized Customer Representative in Step 2, the Franchisee shall include details about the meeting date, attendees, and the Customer' s decision in Franchisee' s next monthly Exhibit E Tracking Required Tasks For Implementation Of Diversion Programs Page E- 4 13-66
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Document submittal. Franchisee shall fully and completely cooperate with, and reinforce, City's efforts to enforce the City Code and to obtain the Authorized Customer Representative' s approval to implement the required Diversion Program( s).

7. In the event City is successful in obtaining the recalcitrant Authorized Customer Representative' s approval to implement the required Diversion Program( s), City will notify the Franchisee and the Franchisee shall proceed to implement the Diversion Program( s) as described in the Diversion Plan prepared in Step 2 hereof, by completing implementation Steps 1 through 16 of this Exhibit E.

8. In the event the Customer initially approved the Diversion Program plan prepared by the Franchisee in Step 2, and Franchisee has completed Steps 3, 4 and 5, Franchisee shall proceed to implement Steps 9 through 16.

9. Franchisee shall deliver the appropriate type( s) and size( s) of Containers to the Customer' s premises for storage of Single Material Recyclables and Single Stream Recyclable Materials. In the case of a Food Scrap Generator, Franchisee shall also provide the appropriate type(s) and size(s) of Containers for storage and collection of Food Scraps. If the Customer is generating Green Waste/Wood the Franchisee shall provide the appropriate type(s) and size(s) of Containers for storage and collection of Green Waste/ Wood.

10. Franchisee shall Collect the Recyclable Materials, Food Scraps, and Green Waste/ Wood ( as applicable) from the Customer' s Containers at the frequency of Collection required to prevent litter, vectors, odors and Contamination of Divertible Materials in Containers and is, at a minimum, performing Collection of Recyclable Materials and Green Waste/ Wood at least once each week. In the case of a Food Scrap Generator, Franchisee is Collecting the Food Scraps one (1) to six ( 6) times each week as needed to prevent litter, vectors, odors and Contamination of Divertible Materials in Containers.

11. Franchisee shall evaluate and reduce the level of the Customer' s Municipal Solid Waste Collection service to complement the separate Collection of Recyclable Materials, Green Waste/ Wood and Food Scraps. Franchisee shall check back with the Authorized Customer Representative and make at least two 2) additional on -site visits to determine if the initial sizing of the Containers and frequency of service is optimal for the Customer. Franchisee shall recommend appropriate adjustments as needed to the Authorized Customer Representative and implement all adjustments agreed to by the Authorized Customer Representative.

12. Franchisee has provided employee education and training materials to the Customer ( or in the case of Multifamily Dwellings, Gated Communities, HOA' s and mobile home parks, to all management) explaining ( a) the requirements of the Act and of the City Code, ( b) the operation of each Diversion Program and c) specifically what Divertible Materials may be placed in the Recycling Required Tasks For Implementation Of Diversion Programs Page E- 5 13-67
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Container( s) and the Green Waste/ Wood Containers and what materials are to be placed in the Municipal Solid Waste Container( s). In the case of a Food Scrap generator, Franchisee shall explain what Food Scrap materials are to be placed in the Food Scrap Container. Employee/ management training shall include at least one on -site training conducted by the Franchisee for all management and all employees of Customer. If there are multiple shifts, or if management and/ or employees work on different days, Franchisee shall conduct multiple trainings until all management and employees have been trained. Internal containers for the Divertible Materials are to be provided by the Customer, pursuant to the City Code.

If directed by the City, Franchisee shall provide City -approved training posters, signage, and stickers/ labels for the internal Containers showing what materials are allowed in each. Franchisee shall provide training and training materials in English and in any other language requested by the Authorized Customer Representative.

13. Franchisee shall make at least two ( 2) follow- up site visits to confirm the Diversion Program( s) is/are operating optimally within the first two weeks after program initiation. ( These site visits are in addition to the site checks to confirm Municipal Solid Waste quantities and optimization of Municipal Solid Waste service described in Step 11 above.) Franchisee shall respond to the Customer' s questions and to any complaints and shall promptly and successfully resolve all questions and complaints.

14. Within ninety ( 90) days after implementation of each Diversion Program at the premises of the Customer, Franchisee shall ensure that the programs are operating effectively such that the Municipal Solid Waste Container( s) at the premises contain no more than twenty percent ( 20%) Recyclable Materials and Food Scraps ( combined), and the Recyclable Materials Container( s) contain no more than ten percent ( 10%) Municipal Solid Waste and Food Scraps, combined ( if the Customer generates Food Scraps). If the Customer is participating in the Food Scrap Diversion Program, the Food Scrap Container( s) shall contain no more than ten percent ( 10%) of any non- food materials. If these performance standards are not being achieved, Franchisee shall work with the Customer, Authorized Customer Representative, owner( s), manager( s) and employees as needed to re-train, troubleshoot and otherwise provide technical assistance to ensure the Contamination standards described herein are met.

15. Franchisee shall conduct a minimum of one ( 1) annual on -site review of the Diversion Plan prepared for the Customer in Step 2, and of each Diversion Program at each Customer, and conduct and annual re-training for all employees, residents and tenants ( that meets all of the requirements listed for the initial training required in Step 12). Franchisee has conducted troubleshooting for each Diversion Program and ensure that each Diversion Program is robust and successfully Diverting the targeted materials within the Contamination limits identified in Step

14. 16. In the event the Customer has a functioning Diversion Program that has been implemented by the Franchisee through the completion of all required actions and tasks in steps 1 through 15 and the Diversion Program( s) is not Required Tasks For Implementation Of Diversion Programs Page E- 6 13-68
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successfully Diverting all targeted Material( s) and/ or is not meeting the Contamination performance standards in Step 14, the non -compliant Customer shall be reported to City on the Exhibit E Tracking Document in the section labeled Non -Compliant Customers Referred to City for Compliance Action Under Newport Beach Municipal Code". City will contact the Customer concerning the requirements of the Act and the City Code. This may include warnings to the Customer, Notice of Violation, fines and/ or other enforcement actions. If the Authorized Customer Representative agrees to take all necessary steps to fully implement the Diversion Program(s) as required by the Act and the City Code, City will refer the Customer back to the Franchisee for additional on -site work, training of the Customer' s management and employees, troubleshooting and all Steps in this Exhibit E required to achieve full implementation of the program( s). In such event, the Customer shall be removed from the list of " Non - Compliant Customers Referred to City for Compliance Action Under Newport Beach Municipal Code" in the Exhibit E Tracking Document. If the Authorized Customer Representative continues to refuse to take the steps necessary to fully implement one or more of the required Diversion Programs after City action, the Customer will remain on the Non -Compliant Customer list. In the City's sole discretion, upon receipt of written notice by the City, the Franchisee may be relieved of the responsibility to implement the Diversion Program( s) specified by City, at that non -compliant Customer' s premises.

B. In the event there is a change of ownership, management or other change resulting in cessation of a Diversion Program(s) or causing any one of the steps herein to not be fully complied with at all times, Franchisee shall repeat all steps necessary to establish or re- establish a fully implemented Diversion Program. Franchisee shall complete re- establishment of a fully implemented Diversion Program within ninety ( 90) days of either ( i) discovering any malfunction in the Program, or ( ii) City or Customer reporting a problem to Franchisee, whichever is earlier.

C. For each Diversion Program required by this Franchise for each Customer, Franchisee shall be responsible for maintaining fully implemented, successfully operating program( s) as described herein, for as long as the Customer is served by the Franchisee.

In the event a program malfunctions or is not operating optimally at any time, Franchisee shall repeat all steps included in this Exhibit E that are necessary to re- establish a fully implemented Diversion Program. Franchisee shall accomplish this within ninety ( 90) days of either ( i) discovering any sub -optimal functioning of the Program, or ( ii) City or Customer reporting such sub -optimal functioning to Franchisee, whichever is earlier.

D. Franchisee shall submit, as part of Franchisee' s monthly reports described in Section 16 of the Franchise, a monthly report describing the status of each step listed herein for each type of Diversion Program, for each Customer and shall include details for each step as follows:

Details of all Customer interactions for the month ( and for prior months) including telephone calls, texts, e- mails, site visits, Authorized Representative and/ or other persons contacted
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Dates of all such contacts
Photos from the site visits and assessments conducted
Photos of any internal Diversion Programs being conducted by the Customer
Customer objections
Log of contamination incidents
Franchisee staff/ representative( s) making the contacts Franchisee lead staff person responsible for each Customer' s Diversion Program implementation.

With regard to Customers with fully implemented, successfully operating Diversion Programs, the Exhibit E Tracking Document shall include any changes in the program( s) during the preceding month ( change of Containers, Container sizes, frequency of Collection) and shall also list the date of Franchisee' s next planned site visit to that Customer' s premises.

This portion of the monthly report shall be called the " Exhibit E Tracking Document".

E. The Exhibit E Tracking Document shall be filled in on the City -provided electronic template. No other templates or formats will be accepted. Use of any alternate format or template shall result in the monthly report being considered incomplete and inaccurate and the Franchisee shall be subject to assessment of liquidated damages pursuant to Section 24B of the Franchise.

F. Each monthly report shall also include a copy of the Diversion Plan(s) prepared by Franchisee for Customers as described in Step 2 of this Exhibit E, during the preceding month. When Containers for any Diversion Program are delivered, changed or removed, the number, sizes and types of Containers delivered, changed or removed shall be noted in the Exhibit E Tracking Document along with the frequency of service for each Container. All changes in frequency of Collection service for a Diversion Program shall also be noted in the Exhibit E Tracking Document.

G. The City Code provides a process for Customers to request a waiver from the requirements to implement Diversion Program( s) due to lack of available space and/ or de minimus quantity( ies) of Divertible Materials. In the event a Customer served by Franchisee has applied for such a waiver, Franchisee shall note this in the Exhibit E Tracking Document.

If the waiver is approved by the City, Franchisee shall confirm this with City and shall record this in the Exhibit E Tracking Document. Franchisee shall be relieved of its duty to provide the Diversion Program( s) that are specified in the waiver granted by the City, for the effective dates of the waiver.

Annually thereafter, thirty ( 30) days prior to the termination date of the waiver, ( or in the event of a waiver of less than twelve months, thirty ( 30) days prior to the termination date of the waiver) Franchisee shall submit a written request to City to determine whether Required Tasks For Implementation Of Diversion Programs Page E- 8 13-70
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the Customer applied for, and was granted a new waiver for another twelve ( 12) month or shorter) period. If so, Franchisee shall record this in the Exhibit E Tracking Document and shall be relieved of its duty to provide the Diversion Program(s) that are specified in the new waiver granted by the City for the period the new waiver is effective.

This process shall be repeated by Franchisee thirty (30) days prior to the expiration date of each waiver, as long as the Customer is served by the Franchisee at the same premises.

In the event a Customer' s request for a waiver is denied by the City, Franchisee shall comply with all the requirements contained in Sections 12, 13 and 14 and in this Exhibit E to fully implement all Diversion Programs required by this Franchise.

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EXHIBIT F

CONSTRUCTION AND DEMOLITION DEBRIS DIVERSION PROGRAM
Franchisee shall provide all services necessary to support Customer compliance with, and City's enforcement of, the CaliforniaGreen Building StandardsCode requirements for Diversion of Construction and Demolition Debris.

Franchisee' s Construction and Demolition Debris Diversion Program shall include, but not be limited to:

A) Informing all Customers requesting Construction and Demolition Debris hauling services of the requirements of the California Green Building Standards Code; B) Providing Containers and/or Bins, Roll Off Boxes, and Compactors as needed for storage and transport of single - material Construction and Demolition Debris, and commingled Construction and Demolition Debris;
C) Providing Collection service for all Containers on a timely basis, which, at a minimum, complies with Section 11 of the Agreement; and
D) Working and coordinating with Customer, or customer' s recycling coordinator, to ensure a smooth and effective Diversion program and the Diversion of a minimum of sixty- five percent ( 65%) of all Construction and Demolition Debris generated at each of Customer's job sites (or a higherpercentageDiversionif requiredby the CaliforniaGreen Building Standards Code) for which Franchisee is providing Construction and Demolition Debris Collection service.

Franchisee shall inform Customers utilizing Containers and/or Bins and Roll Off Boxes on a temporary basis, that materials being generated must be Diverted pursuant to the requirements of City Code and the California Green Building Standards Code.

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STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.

CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; the foregoing resolution, being Resolution No. 2025-6 was duly introduced before and adopted by the City Council of said City at a regular meeting of said Council held on the 28thday of January, 2025; and the same was so passed and adopted by the following vote, to wit:

AYES: Mayor Joe Stapleton, Mayor Pro Tern Lauren Kleiman, Councilmember Michelle Barto, Councilmember Noah Blom, Councilmember Robyn Grant, Councilmember Sara J.

Weber, Councilmember Erik Weigand
NAYS: None
INWITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 2V1 day of January, 2025.
j-
Leilani I. Brown
City Clerk
Newport Beach, California
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On the Agenda: February 11 City Council Meeting
The next meeting of the Newport Beach City Council will be on Tuesday, February 11 at 4 p.m. The full agenda is available here.

Agenda items include:
• A proposal to reduce flashy fuels and restore habitat in Buck Gully reserve. The $425,000, 8 -year agreement with the Irvine Ranch Conservancy would: replace flammable, non -native, annual vegetation with non-flammable cacti; replace flammable, annual vegetati on with less flammable coastal sage scrub/grassland vegetation; eliminate invasive artichoke thistle; and create habitats for the California Gnatcatcher and Coastal Cactus Wren. • Consideration of awarding non -exclusive commercial solid waste franchises to BC Hauling and Demolition, California Waste Services LLC, and Tim Greenleaf Engineering. Following a public hearing, the City Council will consider an ordinance granting franchises to these entities. • A resolution that would allow credit card fees charged by third parties for City-related transactions to be paid directly by the consumer. The City accepts a variety of payment methods, including cash, check, credit card, ACH electronic transfers, and e-check for services such as utility bills, permits and fines. The City currently charges a 2.85% credit card convenience fee; however, processing fees vary due to different card types, third -party vendors, and payment platforms. Therefore, the City seeks to pass through actual processing costs. Customers can avoid credit card fees by paying via e-check or ACH electronic transfer.
• Consideration of a request to waive City Council Policy L -2 (driveway approaches), and approve a coastal development permit for a duplex at 3601 Lake Ave. The action would waive Policy L-2, which generally requires vehicular access for new residential developments adjoining an alley to be taken from the alley. However, due to an above -ground utility in the alley that cannot be relocated, the proposed duplex would provide alternate vehicular access. The applicant, Brandon Architects, also requests a coasta l development permit to allow demolition of a single -unit dwelling and the construction of a new 4,218-square-foot duplex.

VIEW THE FULL AGENDA >>

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February 11, 2025, City Council Agenda Comments
The following comments on items on the Newport Beach City Council agenda are submitted by:

Jim Mosher ( [email protected] ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item VII. MATTERS WHICH COUNCILMEMBERS HAVE ASKED TO BE

That includes not filling vacancies and having last met on July 15, 2024.

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Newport Beach City CouncilFebruary 11, 2025

Newport Beach City Council
February 11, 2025